Unemployment Rate At 4-Month High In December: CMIE Data
India has welcomed the new year 2022 with a continuing unemployment crisis, with the rate climbing steadily from October 2021 onwards to reach 7.91% in December 2021 nationally. In urban areas, the rate reached 9.30% which is the highest it has been since August 2021. The most recent unemployment rate data is at a four-month high in the country.
According to data by the Centre for Monitoring Indian Economy (CMIE), unemployment reached its peak in May 2021 simultaneously with the height of the coronavirus pandemic’s second wave, touching 11.84% nationally, and then in August, when it climbed to the rate of 8.32%.
The top 5 states where unemployment rates are highest in Haryana, Rajasthan, and Jharkhand, Bihar, and Jammu and Kashmir with respective rates being 34.1%, 27.1%, and 17.3%, 16%, and 15%. Until today, i.e., on 2nd January 2022, the 30-day moving average is 7.82% nationally, 9.22% in urban areas, and 7.18% in rural areas.
CMIE’s data is one of the few reliable sources of information on the present employment crisis in the country as the government does not release weekly figures.
Growth Slow In Core Economic Sectors
The Department for Promotion of Industry and Internal Trade (DPIIT) said in a press release date 31st December 2021 that as of November 2021, the annual growth in eight core sectors of the economy had been 3.1%, the lowest it has been since February 2021, when it had tanked to -3.3%.
The growth in crude oil was at -2.2% in November 2021, remaining in the negative zone throughout the year, followed by cement which stands at -3.2% in November 2021 which was36.3% in August. Similarly, the growth rate of the electricity sector is at 1.5% for November 2021 against 16% in August, whereas its peak was 38.5% in April. The steel sector has also recorded a growth of 0.8% in November 2021 being in steady decline since May 2021 itself, standing at 6.9% in August.
The slow growth of core sectors gives us an idea of the unemployment situation being created sine these sectors are not expanding fast enough to accommodate the increasing labour force.
Will Restrictions Amid Omicron Variant Surge Aggravate Job Crisis?
The possibility of a third wave of coronavirus infections due to the new Omicron variant has dampened consumer sentiment and threatens to reverse the economic gains made towards recovery in the previous quarter.
There are renewed restrictions being imposed in several states like West Bengal and Maharashtra and this is impacting operations, supply-chains, and service delivery of many businesses.
The full-fledged lockdown that was imposed nationwide in 2020 had a devastating impact on jobs and business, and many are anticipating that similar restriction in the wake of a third wave of COVID infections can have a similar effect. At the end of March 2020, unemployment reached over 23% according to the CMIE.
In West Bengal, there is a 50% cap on office attendance for both private and public corporations. Schools and universities have bene closed for students and only administrative staff are being allowed to attend. From today, i.e., Monday, swimming pools, spas, gyms, salons, and beauty parlours will be shut in the state, affecting many informal jobs.
Karnataka revenue minister R Ashoka has also termed a third wave of corona infections “inescapable”. “We will soon impose more stringent restrictions in the state and urge people to cooperate with the government, failing which a lockdown will be inevitable”, he said, while announcing that a high-powered committee will take a decision on this on 4th or 5th January.
The top 5 states where unemployment rates are highest in Haryana, Rajasthan, and Jharkhand, Bihar, and Jammu and Kashmir with respective rates being 34.1%, 27.1%, and 17.3%, 16%, and 15%. Until today, i.e., on 2nd January 2022, the 30-day moving average is 7.82% nationally, 9.22% in urban areas, and 7.18% in rural areas.
CMIE’s data is one of the few reliable sources of information on the present employment crisis in the country as the government does not release weekly figures.
Growth Slow In Core Economic Sectors
The Department for Promotion of Industry and Internal Trade (DPIIT) said in a press release date 31st December 2021 that as of November 2021, the annual growth in eight core sectors of the economy had been 3.1%, the lowest it has been since February 2021, when it had tanked to -3.3%.
The growth in crude oil was at -2.2% in November 2021, remaining in the negative zone throughout the year, followed by cement which stands at -3.2% in November 2021 which was36.3% in August. Similarly, the growth rate of the electricity sector is at 1.5% for November 2021 against 16% in August, whereas its peak was 38.5% in April. The steel sector has also recorded a growth of 0.8% in November 2021 being in steady decline since May 2021 itself, standing at 6.9% in August.
The slow growth of core sectors gives us an idea of the unemployment situation being created sine these sectors are not expanding fast enough to accommodate the increasing labour force.
Will Restrictions Amid Omicron Variant Surge Aggravate Job Crisis?
The possibility of a third wave of coronavirus infections due to the new Omicron variant has dampened consumer sentiment and threatens to reverse the economic gains made towards recovery in the previous quarter.
There are renewed restrictions being imposed in several states like West Bengal and Maharashtra and this is impacting operations, supply-chains, and service delivery of many businesses.
The full-fledged lockdown that was imposed nationwide in 2020 had a devastating impact on jobs and business, and many are anticipating that similar restriction in the wake of a third wave of COVID infections can have a similar effect. At the end of March 2020, unemployment reached over 23% according to the CMIE.
In West Bengal, there is a 50% cap on office attendance for both private and public corporations. Schools and universities have bene closed for students and only administrative staff are being allowed to attend. From today, i.e., Monday, swimming pools, spas, gyms, salons, and beauty parlours will be shut in the state, affecting many informal jobs.
Karnataka revenue minister R Ashoka has also termed a third wave of corona infections “inescapable”. “We will soon impose more stringent restrictions in the state and urge people to cooperate with the government, failing which a lockdown will be inevitable”, he said, while announcing that a high-powered committee will take a decision on this on 4th or 5th January.
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