Labor market conditions improved in May as several people returned to work, even though the unemployment rate remains “very high” at 23.5 percent, the Indian Economic Monitoring Center (CMIE) said Tuesday. . A total of 2.1 million jobs in crore were added in May, and the labor participation rate improved significantly, CMIE said in a statement released Tuesday. The latest data on unemployment from the group of experts from the private sector come days after the country entered the fifth phase of a national blockade to stop the spread of the coronavirus pandemic, which has affected an already slowing economy, affecting to companies and attracting thousands of unemployed workers.
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Of the 2.1 million jobs added in May, 1.44 million were small merchants and salaried workers representing one third of the total employed population. As the economy has gradually opened up in some parts of the country, this predominantly autonomous class is returning to business.
“Several people who had left the active labor markets in April returned in May. People who had left the labor market in April due to large-scale job losses had been stationed in the passive unemployed category,” said Mahesh Vyas, chief said the Mumbai-based expert group. “In May, many of these returned, actively seeking work,” he added.
The increase in jobs of Rs 2.1 million last month translates into growth of 7.5 percent from the previous month, and the jobs of small traders and salaried workers rose 39 percent, the CMIE said. Last month, the expert group reported that 12.2 crore workers lost jobs in April alone.
The country’s unemployment rate was 23.5 percent in May 2020, which is the same rate recorded in the previous month. However, the labor participation rate (total number of people currently employed or looking for work) improved from 35.6% to 38.2%, and the employment rate improved from 27.2% to 29.2%, according to the CMIE.
“While the main labor market metrics indicate an improvement in May compared to April, labor market conditions remain much weaker than they were prior to closing,” Vyas wrote.
However, he expressed concern about the continued loss of good quality jobs. “Salaried jobs are relatively difficult to come by. And the salaried jobs lost during a lockdown are much more difficult to get back. These are also the best jobs,” wrote Vyas.
Meanwhile, many economic groups have lowered their growth projections for the current financial year due to damage caused by the COVID-19 outbreak, with some even warning of the worst recession in years.
However, economic growth had plummeted, to a minimum of 11 years even before the full onset of the coronavirus, and economists say the real impact of the pandemic on the crisis economy will be visible in the June quarter.
Last week, official data showed that the country’s gross domestic product (GDP) expanded 3.1 percent in January-March, reflecting only the partial impact of the COVID-19 blockade on the manufacturing and services sectors. With this, the annual expansion of GDP stood at 4.2% in fiscal year 2019-20, the lowest growth rate in 11 years.
On Monday, Moody’s downgraded India’s credit rating to a level above trash, citing a prolonged period of slow growth in Asia’s third-largest economy, rising debt, and persistent stress in parts of the financial system. The rating was downgraded to “Baa3” from “Baa2”, maintaining a negative outlook for the new sovereign rating.