The Centre for Monitoring Indian Economy (CMIE) said that absolute employment fell to 397.8 million in August, compared to 399.7 million in July.

Migrant labour walking on roadPTI /Image for representation
Money Jobs Friday, September 10, 2021 - 18:22

The unemployment rate in India climbed to 8.3% in August 2021, up from 7% in July, with 1.9 million jobs lost in the country last month, according to the Centre for Monitoring Indian Economy (CMIE). The CMIE’s report added that this has led to a dip in the employment rate to 37.2% in August from 37.5% in July, with absolute employment down to 397.8 million compared to 399.7 million in July.

“The loss was essentially in farm jobs and reflects the seasonal nature of employment and uncertainty caused this year by an erratic monsoon,” the CMIE noted in its weekly analysis. As per the CMIE, employment in agriculture fell by 8.7 million in August, while non-farm jobs increased by 6.8 million at the same time. Employment in the form of business persons increased by nearly 4 million, and those in the form of small traders and daily wage labourers increased by 2.1 million. Salaried jobs increased marginally, by 0.7 million during the month, it added. 

The CMIE noted that a major chunk of the labour shed by agriculture was absorbed in the services sectors. “On the contrary, the industrial sector shed jobs, with employment in the industrial sector in August 2021 being 2.5 million less than in July 2021. Further, the manufacturing sector shed 0.94 million jobs in August. Factories, it seems, are not a reliable source of employment,” it said. 

The report added that the services sector provided 8.5 million additional jobs in August, with personal non-professional services and retail trade being the big absorbers of employment within the services sector. “Given that salaried jobs increased by only 0.94 million, most of these jobs in the retail trade industry are likely to be informal in nature,” the CMIE noted, adding that a majority of the gross increase in employment of over nine million in these two sectors was mostly informal. 

According to the CMIE, the manufacturing sector has permanently lost about 10 million jobs in the pandemic-induced lockdowns. “Before the COVID-19 crisis, the manufacturing sector employed about 40 million (people) which fell to 21 million in April 2020 and quickly climbed back to a level just short of 30 million by July 2020. Then the second wave brought employment in manufacturing down again to 26 million before recovering to nearly 29 million in July. But in August, it slipped back to 28 million,” it stated. 

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