5 Million Salaried Indians Lost Jobs In July Says CMIE

In July, where the unemployment rate improved, the Centre for Monitoring Indian Economy said that nearly 5 million salaried people lost their jobs and that the recovery was largely driven by the informal sector. The Mumbai-based think tank also cautioned the rising unemployment in the formal sector, where the total number of jobs lost since the pandemic stands at 18.9 million, is a source of worry.

CMIE data showed that 17.7 million salaried jobs were lost in April 2020 and another 0.1 million jobs in May. While June saw a recovery of 3.9 million jobs, an additional 5 million jobs were lost in July.

"On a net basis, the plight of salaried employees has worsened since the lockdown began as by July, their losses had swelled to 18.9 million," CMIE said.

The CMIE Unemployment Survey has become the proxy for evaluating the state of the labour market in the country since its inception. The labour force consists of employed persons and persons who are unemployed but actively looking for jobs. The survey includes a sample size of 43,600 households per month disturbed well across urban and rural areas.

"While salaried jobs are not lost easily, once lost they are also far more difficult to retrieve. Therefore, their ballooning numbers are a source of worry," CMIE cautioned. Salaried jobs were nearly 19 million short of their average in 2019-20.

It is estimated that only 21 percent of all employment in India is in the form of salaried employment.

While in April, 30 percent of the employed persons had lost their employment, by July less than 3 percent were bereft of their source of livelihood, CMIE said, adding at 11 million job losses, it is still a significant setback.

In July, the unemployment rate had managed to recover significantly to pre-COVID levels, that is to 7.43 percent from 10.99 percent in June. The rural unemployment rate in July had shown a better recovery by falling to 6.6 percent against 10.52 percent in June, which economists said due to good monsoon and better sowing season in rural India along with the gradual resumption of the economic activities in urban centers during the month. Since the recovery was due to a rise in agricultural activities, it was expected to be temporary.

CMIE says that perhaps this also reflects the desperation of Indians to get back to some employment after a rather prolonged involuntary break.