Urban Unemployment Rate Shows Impact Of Covid-19

During October-December 2020, India saw a surge in the unemployment rate to 10.3% in all age groups in comparison to the unemployment rate in the corresponding months in 2019. The same was reported by the National Statistical Office in a periodic labour force survey. In India, the unemployment rate is calculated as the percentage of unemployed persons in the labour force. The labour force refers to the population that either offers or supplies labour for different economic activities for the production of services and goods and includes both the unemployed and employed populations.

Unemployment Rate: High Or Low?

The unemployment rate sadly has remained high for the third consecutive quarter this year. The unemployment rate was expected to rise by different experts due to the Covid-19 impact. However, there is an improvement in the unemployment rate in comparison to the data available in April-June 2020 which reported an unemployment rate of 20.8%. The high unemployment in the last year can be attributed to the peak of the national lockdown. 


Not only the health infrastructure of the country was affected by Covid-19 but also the economy faced a hard hit with many citizens losing jobs and engaging in Lottery Sambad to earn some money for their livelihood. The migrators were the most affected by it and people kept their fingers crossed while checking the Teer Result. However, this year when the economy slowly opened up, the job situation has improved for many. 


The highest rate of unemployment was seen in Jammu and Kashmir at 17.8%. Other states that faced the highest unemployment rate include Kerala (16.7%) and Jharkhand (16%). The minimum employment rate was seen in Gujarat at 4%. Also, the women were more affected by job loss in comparison to men. In 2020, 22 states saw the unemployment rate in double digits, however, in 2021, only 12 states are seeing the unemployment rate in double digits. 

Report By Periodic Labour Force Survey (PLFS)

In 2017, the Periodic Labour Force Survey was launched. It is a quarterly survey that is designed to provide useful insights into indicators of the labour force that includes: worker population ratio, unemployment rate, labour force participation rate, work population ratio, the industry of work in current weekly status and distribution of workers by broad status in employment. Till now, including the current bulletin, night bulletins of periodic surveys have been conducted. 


According to the latest report by the Periodic Labour Force Survey, a steady improvement is seen in the market with the unemployment rate dropping to 10.3%. However, many are still questioning whether this is an improvement or does the number show the drastic problem in which the Indian economy currently is present. Soumya Kanti Ghosh, group chief economic advisor at State Bank of India has added that even though the lockdown is over, the participation of the labour force has increased only marginally and only a marginal improvement is a matter of concern for the country. 

The Problem With PLFS

Recently, the Statistics Ministry was asked by the Finance Ministry to make quarterly employment data available which should be released with only a lag of a month to show fruitful policy-making decisions. Currently, the data which is released by PLFS sees a lag of 45 days in showing quarterly jobs data. The time lag by PLFS has reduced the importance of the data which is provided by it as it creates roadblocks in the timely creation of policymaking. 

The Scary Situation Of Job 

In July, the employment rate in the country saw a tad improvement. However, in August, 1.5 million people including members of both the formal and informal sector lost their jobs. In July 2021, the number of people employed was 399.38 million and this reduced to 397.78 million in August. In addition to urban India, even rural India saw the impact of Covid-19. The unemployment rate increased rapidly for the urban area, however, the general unemployment rate was high both for rural and urban regions. 


With the fall of the unemployment rate in August, the month also saw a climb in the labour force participation rate. The reason behind the same can be attributed to the fact that many people are actively looking for job opportunities in the market. Even before the country was hit by the Pandemic, it was witnessing a tough environment for jobs and the outbreak of the pandemic simply made the matter worse. The government is trying its best to ensure that the economic activity goes back to normal, however, the same cannot be said for the job market which is in hot soup.