The unemployment rate in India has risen sharply to 9.1 percent in December 2020—its highest in the past six months, since the unlocking of business activity last June. This rate was 6.5 percent in November last year and 10.99 percent in June.
The increase in the unemployment rate is worrying; it shows that people have thronged back to the labour market, seeking jobs but faced with no employment. It is also a sign that people who had jobs till now would have lost them and their source of livelihood.
The rise in unemployment in December is also the result of a partial rise of the labour participation rate (LPR). The LPR is the percentage of people above the age of 15 participating in the labour market by either looking for or already having a job.
The LPR for December 2020 was 40.6 percent compared to 40 percent in November. In December, employment fell by 5 million to 389 million—from 394 million in November—out of the 427 million who participated in the market, thereby marking the number of people without a job at 38 million. The number of unemployed was at 27 million last November. The agriculture sector, due to the winter season, was unable to absorb the increase in the labour market. That is the time when jobs are dispensed with.
STRESS IN THE UNORGANISED MARKET
2020 reminded us that India’s labour market continues to be largely unorganised. People who have employment are not just those who are working with large corporates, having regular salary packages. It comprises largely those who are skilled, but informally employed, such as hawkers, vegetable delivery boys, daily wage labourers, carpenters or electricians.
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