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Indian employment scenario - CMIE survey Jan 2021
Read more on - Polity | Economy | Schemes | S&T | Environment
- Employment bounces back: In January 2021
India recorded a significant fall in the unemployment rate. There also was an
increase in the employment rate. The unemployment rate dropped to 6.5 % (from
9.1 % in December 2020) and the employment rate rose to 37.9 % (from 36.9 %).
These are CMIE data.
- Data and numbers: The number of people employed increased from 38.88 crore in December 2020 to 40.07 crore in January 2021. So almost 1.2 crore new people found employment in January. In pre-pandemic times, monthly variations would usually be 50 lakh or so. The increase in January was twice this max variation. In October 2020, the recovery process had slowed down and then stalled even before the recovery was complete. Employment declined in each of the three months October through December 2020. The January 2021 recovery is a good sign.
- The increase in Jan employment nos. has reduced the count of unemployed to 2.79 crore
- These are the unemployed who are willing to work and actively looking for employment
- This low number is a goo sign, as on an average 3.3 crore persons willing to work and looking for work were unemployed in 2019-20
- So that is now down to less than 2.8 crore (so a 1 crore increase)
- The unemployment rate: It has been volatile in the past six months and ranged from 6.5 % in November 2020 to 9.1 % in December 2020. The average during this six-month period was at 7.4 %. This volatility was a reflection of very high volatility in the month-on-month variation in the count of the unemployed. A very large number of people move in and out of being unemployed from one month to the next. There are, on average, about 30 million (3 crore) unemployed persons, that is a very high level of volatility. Volatility during lockdown and pandemic was due to an external shock.
- In normal times: The high monthly volatility of unemployment in normal times reflects the high proportion of informal employment in India. A person could be employed on one day and not on the next, or vice versa. Most employed persons in India do not have regular jobs. Their employment on any given day depends upon the state of the economy, upon the local environment, business conditions at large and a fair degree of luck.
- More jump: The two months of December 2020 and January 2021 saw an unusual jump in this volatility. In December 2020, India added 11.3 million (1.13 crore) unemployed persons. In January 2021, the count of unemployed declined by 1.07 crore. These are extraordinary variations. In January 2021 India reverted to its normal count of the unemployed, which averages at 2.8 crore.
- CMIE’s Consumer Pyramids Household Survey: This captures two levels of unemployed. A person is considered to be unemployed only (i) if such a person is willing to work but does not have any employment, or (ii) such a person is unemployed and willing to work but not actively looking for work.
- The CMIE distinguishes such people into those who are actively looking for work and those who are not.
- The unemployed and the unemployment rate computed by CMIE are based on the count of the unemployed who are willing to work and are actively looking for employment.
- These were 2.79 crore in January 2021.
- There were another 1.21 crore who were also unemployed and willing to work but not actively looking for work.
- CMIE does not consider these in its computation of the unemployment rate.
- The total unemployed who were willing to work but did not have any employment in January 2021 was 4 crore.
- Employment in India is still lower than it was before the lockdown, but there are lesser unemployed people willing to work as well.
- Knowledge centre:
- CMIE - The Centre for Monitoring Indian Economy is a business information company, established in 1976 as an independent think tank. It has a presence over the entire information food-chain - from large scale primary data collection and information product development through analytics and forecasting. It produces economic and business databases and develops specialised analytical tools. It is head-quartered at Mumbai. The MD is Mahesh Vyas.
- LFPR - The labor force participation rate is a measure of an economy's active workforce. It is the sum of all workers who are employed or actively seeking employment divided by the total civilian working-age population (WAP).
- WAP - The working age population (WAP) refers to people aged 15 to 64.
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