India’s unemployment rate in May remained very high at 23.5%, but a total of 2.1 crore jobs were added as the labour market conditions improved last month, showed data released by the Centre for Monitoring Indian Economy on Tuesday. The data from the private sector think-tank was released a day after the country began the fifth phase of the lockdown, with some relaxations.

“The unemployment rate at 23.5% in May 2020 was the same as it was in April 2020,” CMIE said. “But, the labour participation rate improved from 35.6% to 38.2% and the employment rate improved from 27.2% to 29.2%.”

The main labour market metrics show an improvement in May as compared to April, however, it continues to remain weak than the pre-lockdown period, the think-tank added. “A number of people who had left the active labour markets in April returned back in May,” CMIE Managing Director and Chief Executive Officer Mahesh Vyas said. “People who had left the labour market in April because of large-scale job losses, had parked themselves in the passive unemployed category. They declared themselves as unemployed and willing to work but not actively looking for jobs. In May, many of these were back, actively looking for jobs. The increase in jobs in May had possibly influenced the passive unemployed labour force to become active.”

Of these 2.1 crore jobs added last month, 1.44 crore were small traders and wage labourers who account for a third of the total employed population, CMIE said. “This workforce was the most vulnerable to the lockdown,” Vyas said. “In April, 71% of them had lost jobs. As the economy has been opening up gradually in parts of the country, these are back to their business. Since these are predominantly self-employed persons it is relatively easy for them to resume work when conditions permit.”

The 2.1 crore increase in employment translates into a 7.5% rise in jobs over April, data said. Meanwhile, the jobs of small traders and wage labourers increased by a massive 39%.

Vyas raised concern about the continued loss of salaried jobs in the country, which declined marginally in May. “Salaried jobs are relatively difficult to get,” he added. “And, salaried jobs lost during a lockdown are far more difficult to recover. These are also the better jobs. The continued loss of good quality jobs is therefore worrisome.”

The managing director said it would take a very long time to undo the damage suffered by large number of families during the extended lockdown.

India has reported 1,98,706 coronavirus cases so far, with 5,598 deaths. The economy is battered by the weeks-long lockdown.

On Monday, global credit rating agency Moody’s Investors Service downgraded India’s sovereign rating to “Baa3’’ from “Baa2’’, saying the country faces a prolonged period of slower growth relative to the country’s potential amid rising debt and persistent stress in parts of the financial system.

The Gross Domestic Product growth rate stood at 3.1% for the fourth quarter of 2019-’20, according to data the government released last week. In the October to December 2019 quarter, the country’s economic growth stood at 4.7% – a seven-year low. However, the final figures released for the third quarter on Friday showed that India’s GDP grew at 4.1% during October to December last year.