By Gyan Pathak
The despair on the job front has slowly been replaced by hope. The year 2021 has well begun. A significant fall in unemployment rate has been recorded in January, while employment rate rose though not so impressive. The gains can be consolidated, but would require a great push to the labour intensive business and industries, particularly the Micro, Small, and Medium Enterprises (MSMEs). Additionally, the course of fast deteriorating quality of job especially after the pandemic needs to be reversed, which can be done only by putting on hold the four labour codes that the Modi government has got passed in the parliament and subsequently notified.
The fall in unemployment rate from 9.1 per cent in December 2020 to 6.5 per cent in January 2021, as stated in the latest CMIE report, is of course significant. It creates a great hope among the jobseekers in a background of almost cent per cent joblessness during the lockdown of the economy, and only a little improvement thereafter. However, the government will have to work relentlessly, because even with 2.6 per cent fall in unemployment, India is still at the unemployment level of two years back in 2018, which was 45 years high. Any complacency on the part of the government therefore would be dangerous.
It is worth mentioning that the government then could not reign in the rise in unemployment, which grew with downturn in the economy that registered a steep fall in growth of the GDP to 4.9 per cent just before the outbreak of the pandemic. Unemployment rate stood at 6.5 per cent in November 2019 which grew to 10.99 per cent in June 2020 when the government started unlocking the economy. By December 2020, the unemployment rate at 9.1 coupled with inflation rate of around 7 per cent gave rise to suspicions about the recovery of the Indian economy. Given the uncertainties ahead, we need to be very careful despite the gains in January 2021.
We need jobs for all hands, but the rise in employment rate was only one percent from 36.9 per cent in December 2020 to 37.9 per cent, though it is a big positive change. It indicates that recovery is far from satisfactory, since there is much difference between the fall in unemployment rate and rise in employment rate. It also indicates the difficulties ahead.
In absolute terms, the number of people employed increased from 388.8 million in December 2020 to 400.7 million in January 2021, which means nearly 12 million addition jobs were bagged by the jobseekers. When we compare it with the employment trend in the country, which month-over-month rarely crossed the 5 million mark even before the lockdown, we find it impressive. However, we cannot ignore the past experience, especially after the beginning of unlocking of the economy since June 2020. First, employment rose with the recovery process, then it slowed down and stalled even before the recovery was complete. Employment rate was then declined in each of the three months between October and December 2020. The recovery in January 2021 is therefore a welcome relief, but it needs to be sustained with sustained efforts.
Sudden increase in employment in January 2021 has reduced the number of unemployed to 27.9 per cent as against the average 33 million who were looking for employment in 2019-20, ie before the outbreak of the pandemic. It caused the unemployment rate to fall to 6.5 percent. It shows the volatility of the unemployment scenario that continues from the last six months ranging from a low 6.5 per cent to 9.1 per cent, the average being about 7.4 per cent, much higher than 2018’s 6.5 per cent. The volatility also indicates that a very large number of people are moving in and out of employment just from one month to another. It is indeed a distressing situation for the working class who are suffering the uncertainties in jobs. Remember the distress of the working class during 2016-19, when variation in unemployment ranged between +7 per cent and -7 per cent. It means uneasiness on account of unemployment is to continue for quite some time. On an average, about 30 million unemployed persons, is indeed a very high level of volatility.
Such a high monthly volatility of unemployment also reflects the high proportion of informal employment. It is a scenario in which getting job is very uncertain. A worker can find a job one day and lose the next day. It also reflects the lack of regular and quality jobs. The four labour codes and the rules being implemented would make this situation worse which already depends on uncertain conditions of the economy and business. The neglect and apathy for the informal sector and the unsatisfactory measures for revival of the economy and business, especially the MSMEs, are also contributing to the uncertainties.
We must note that the last two months have seen an unusual jump in this volatility. In December 2020, India added 11.3 million unemployed persons. In January 2021, India saw the count of unemployed decline by 10.7 million. These are extraordinary variations, which need to be watched and after ascertaining the reasons proper remedies put in place. Moreover, a very large number of people around 40 million are waiting for employment. We must act fast, to give jobs to all hands that want works. (IPA Service)