India’s labour market showed surprising strength in the second week of June, restoring many jobs that were lost to the economic upheaval caused by the nationwide lockdown and offering some substance to the hope that the worst may be over.
The national unemployment rate fell sharply to 11.63% in the week ended 14 June from 17.51% in the previous week, bringing the job loss rate closer to the levels prevailing before the lockdown, a survey by the Centre for Monitoring Indian Economy, (CMIE) found.
The improvement comes as offices, shops and self-employment avenues reopened after the government lifted nearly all lockdown curbs after more than two months. The ongoing summer crop planting season and the rural jobs guarantee plans also provided employment opportunities to people in the villages.
The urban unemployment rate at 13.1% is higher than both the rural and overall job loss rate, CMIE said.
Economists and job market experts, however, warned that the improvement is largely because of a growth in casual work and self-employment activities, and should not be interpreted as growth in formal sector jobs. Industrial activity has started picking up, but wage employment and a recovery in formal sector jobs will take a much longer time, they argued.