CMIE: Unemployment had fallen to 10.18 percent in June 2020, after reaching a high of 23 percent in May 2020 due to heavy lockdown restrictions

According to Mahesh Vyas, chief executive of the Centre for Monitoring Indian Economy (CMIE), around 10 million Indians have lost their employment as a result of the second wave of COVID-19, and roughly 97 percent of households’ earnings have decreased since the epidemic began last year. According to Vyas, the unemployment rate estimated by the think-tank is anticipated to rise to 12% by the end of May, up from 8% in April, implying that nearly 10 million or 1 crore Indians have lost jobs during this time. “As the economy opens up, part of the problem will be solved,” Vyas said, adding that the main cause of job losses is “mainly the second wave” of COVID-19 infections.

He explained that those who lose jobs have a difficult time finding work, noting that while informal sector occupations return quickly, formal sector and higher-quality job chances can take up to a year to return. Because to the nationwide lockdown, the unemployment rate reached a new high of 23.5 percent in May 2020. Many analysts believe that the second wave of illnesses has peaked, and that states will gradually begin to lift the limitations on economic activities in a calibrated manner. Vyas went on to say that an unemployment rate of 3-4 percent is “normal” for the Indian economy, implying that the unemployment rate will have to fall for longer before the situation improves.

He claimed that in April, CMIE performed a nationwide study of 1.75 lakh homes, which revealed alarming trends in income generation over the previous year, which had seen two waves of the pandemic. Only 3% of those polled indicated their salaries had increased, while 55% indicated their earnings have decreased, according to him. A further 42% of respondents stated their incomes had stayed unchanged from the previous year. “When we account for inflation, we discover that 97 percent of households in the country saw their incomes fall throughout the pandemic,” he said.

He said that the labour participation rate, or the percentage of the working-age population that is employed, has dropped to 40% from 42.5 percent prior to the epidemic. Meanwhile, according to a CMIE poll conducted in April, 97 percent of households’ earnings have decreased since the start of the epidemic last year. Only 3% of respondents surveyed in a survey of 1.75 lakh families indicated they had seen a rise in income. As many as 55% of those polled indicated their incomes have decreased, while 42% claimed their wages have remained the same as the previous year.

As a number of towns and states declared lockdowns of varied intensities to stop the spread of coronavirus infections, Wall Street firm Goldman Sachs cut its projection for India’s economic growth to 11.1 percent for the fiscal year ending March 31, 2022.

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