CMIE Data: Employment declines in October

Ground Report | New Delhi: CMIE Data Employment declines; In the month of October 2021, more than 50 lakh people employed in the formal and informal sectors lost their jobs, according to a data analysis by the Center for Monitoring Indian Economy (CMIE). CMIE said the number of people employed in October was 400.77 million, which is lower than the 406.24 million recorded in September 2021.

CMIE Data Employment declines

The employment rate, along with the labour force participation rate, continued to fall month-on-month in October as compared to September. The national labor force participation rate (LFPR) stood at 40.66 percent in September but declined to 40.41 percent in October. The LFPR in August was 40.52 percent.

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On a brighter note, the universe of employed people in urban India expanded to over 7,12,000 during September through October, as economic activity opened up in cities and urban centres.

Among sectors, while industries shed nearly 7 million people in October as against September, driven mainly by a fall in employment in the real estate sector, a boom in the services sector saved the day in the jobs market.

In September, the country's employment increased by 8.5 million to 406.2 million, the highest level since COVID-19 in the country in March 2020. While the urban unemployment rate fell to 7.38% in October, the lowest in three months, the rural unemployment rate rose. Four-month high at 7.91%.

CMIE MD and CEO Mahesh Vyas, however, found it strange that in October employment fell by 5.5 million, along with a massive increase of 5.3 million among those who declared themselves to be 'business persons'.

“It is strange because this is not the best time to start a business in India. Demand is weak and capacity utilization is low. Household income is largely depressed. In October, less than 10% of households reported an increase in income compared to a year earlier, and 40% reported a decline in modest terms. The rest reported no change,” wrote Vyas in a recent article.

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entrepreneurship is on rise

However, some employee service providers do not subscribe to this approach and paint a rather rosy picture of the employment landscape.

Vyas said the growth in employment as businessmen in October 2021 is likely to be a mere reflection of difficult employment conditions and not growth in real and sustainable entrepreneurship. Those who cannot find an acceptable job resort to self-employment.

“This is evident from the fact that self-employed entrepreneurship is on the rise, not overall employment. In contrast, employment of daily wage workers and small traders declined by 19.6 million, along with an increase of 5.3 million in the employment of businessmen in October. Obviously, the employment situation remains grim despite this curious growth in entrepreneurship,” said Vyas.

lost 2.2 million in October

The second-largest absorber of additional labour in October was individual non-professional services. Employment here grew by 1.8 million from 28.6 million in September to 30.3 million in October 2021.

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Food industries, which absorbed 2.5 million people in September, lost 2.2 million in October. Construction that involved 5.6 million people lost more than 7.7 million in October. These quick reversals of gains in September to a month in October are disappointing. They point to the fragility of the recovery process.

Although the number of people claiming to be farmers increased by 9 million in October, the agriculture sector lost 2.4 million jobs. Clearly, the hit was absorbed by the agricultural labourers. We see this in the decline in daily wage workers, including agricultural labourers.

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