The Centre for Monitoring Indian Economy said on Tuesday that the unemployment rate during the last week of March – with the lockdown due to the coronavirus pandemic beginning March 25 – rose to 23.8%. The overall unemployment rate in March was 8.7%, the highest in 43 months, or since September 2016.
The organisation said the employment rate fell to an all-time low of 38.2% in March.
“Labour participation rate fell to 39% and the employment rate was a mere 30%,” the CMIE report said. The labour force participation rate is a measure of an economy’s active workforce.
The organisation said that though the survey was suspended in the last week of March, enumerators who were in the field on March 24 and March 25 continued to report observations. The observations were procured through telephonic interviews.
“The fall [in employment rate] since January 2020 is particularly steep – almost spectacular,” the report said. “It seems to have nosedived in March after having struggled to remain stable over the past two years. Then, there is a precipitous fall.”
The CMIE said the labour participation rate in March 2020 was 41.9%, compared to 42.6% in February and 42.7% in March 2019. The organisation said that while it had feared a fall in the labour participation rate due to the national shutdown, the reduction happened even before the lockdown came into effect.
The CMIE said this is the first time ever that the labour participation rate has fallen below 42%. The fall in the rate in March was the result of a decline of 90 lakh people in the labour force – from 44.3 crore in January to 43.4 crore in March. Between January and March, the number of employed fell from 41.1 crore to 39.6 crore, and the number of unemployed rose from 3.2 crore to 3.8 crore.
The organisation added that from April 1 to April 5, the unemployment rate, calculated based on 9,429 observations, stood at 23.4%. The labour participation rate was 36% and the employment rate 27.7%.
The lockdown has thrown many migrant labourers out of work. The first week of the 21-day lockdown witnessed reverse migration, on foot, of many of these workers to their hometowns, a movement that was stopped when the Centre banned interstate travel in order to prevent the spread of the coronavirus. At least 111 people have died and 4,421 infected in India so far, according to the Union Ministry of Health and Family Welfare.