On Tuesday, Mumbai-based think-tank CMIE's (Centre for Monitoring Indian Economy) estimates showed that the unemployment rate in India had surged to 23.52 percent in April, the highest since the survey began in 2016.
It is also the first time that the percentage of unemployment is in double digits. As per CMIE's unemployment data, 24.95 percent of the labour force was without work in urban India and 22.89 percent in rural India.
In comparison, the unemployment rate in March stood at 8.74 percent, with 9.35 percent in urban India and 8.45 percent in rural India.
The spike in numbers comes due to the nationwide lockdown that started on 25 March, to curb the spread of COVID-19, which has diminished work opportunities as economic activity sees sharp fall.
However, withdrawal of the lockdown, which is currently extended to 17 May, is expected to yield quick results on the livelihood front, according to the CMIE.
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.
On Monday, a monthly survey on India's manufacturing activity by IHS Markit showed that Nikkei Manufacturing PMI for April fell to 27.4, by far the lowest growth recording since the survey began in March 2005 and its first time below the 50-mark (that separates growth from contraction) in nearly three years.
Many ratings have made drastic cuts on their GDP growth projections for India. Fitch Ratings has said the Indian economy may grow at 2 percent in the current financial year, the slowest pace since the liberalisation of the economy nearly 30 years ago.
Moody's has lowered its forecast for the country's GDP expansion to 0.2 percent in 2020 compared to its earlier 2.5 percent estimate after the lockdown was extended across the nation.