In April, India’s unemployment rate hit a four-month high of nearly 8%

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In April, India’s unemployment rate hit a four-month high of nearly 8%

In April, India’s unemployment rate hit a four-month high of nearly 8%, and the outlook is bleak, with state governments extending lockdowns to stem a record increase in virus cases.

According to data from the Centre for Monitoring Indian Economy Pvt., a private research company, unemployment rose to 7.97 percent in April from 6.5 percent in March, with more than seven million workers lost in the previous month.

“The number of work openings has decreased. This may be due to the lockdowns, according to CMIE Managing Director Mahesh Vyas. “Because the virus is still very active and we are under stress on the medical health-care front, the situation is likely to remain stressful in May as well.”

A total of 3,689 people died in India, a new high. After becoming the first country to register more than 400,000 daily cases on Saturday, the number of new cases slowed slightly on Monday.

Prime Minister Narendra Modi, who announced a strict lockdown in March 2020, which resulted in millions of job losses and a record drop in economic output, is now urging states to use such measures only in extreme cases. Local governments have been forced to impose additional restrictions as the country’s aging health system struggles to cope with the influx of virus cases, jeopardizing the economy’s fragile recovery.

India’s chances of achieving double-digit economic growth this year are jeopardized by a poor job outlook. Many economists have already lowered their forecasts, and others are warning of more declines if provincial restrictions are expanded.


In a research note, economist Rahul Bajoria wrote that “there is growing uncertainty around the number of cases and fatalities,” so Barclays Bank Plc lowered its forecast by one percentage point to 10%. “India’s recovery chances are also being harmed by the slowing of vaccinations.”

Double Whammy

The rise in unemployment comes amid a backlash against government handling of the world’s worst Covid-19 outbreak. BJP just lost the crucial Bengal assembly elections, while foreign envoys are joining Indians on social media clamoring for help with few medical supplies available.

A separate survey Monday by IHS Markit showed the manufacturing sector was still losing jobs in April, though the rate of contraction was the weakest in the current 13-month sequence of job shedding. The CMIE data — which economists track closely in the absence of real-time employment data from the government — show joblessness is more acute in urban areas as labourers return to their villages.

The labor-force participation rate, which includes the number of people with jobs and those seeking work, declined to just below 40 percent in April.

“It’s a double whammy for the economy,” Vyas said. “Some people get disappointed and leave the labour market. The problem is the inability of the Indian economy to generate sufficient jobs for people who want them, so incomes are falling.”

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