The unemployment rate is one of the most important leading indicators of an economy. The CMIE Indian Economic Monitoring Center considers this indicator important for the country, states and Union Territories on a daily and monthly basis. According to the latest data from the CMIE, India has recorded a strong unemployment rate over the past four months amid the increase in Omicron cases. The unemployment rate in India reached a four-month high of 7.91% in December against 7% and 7.75% in November and October 2021. The year 2022 thus opens with a gloomy scenario.
Also read: July unemployment rate reduced to 7.43% in India, back to pre-Covid-19 level
According to the report, the urban unemployment rate reached 9.30% in December while rural employment stood at 7.28%. Both urban and rural unemployment saw a significant increase of 8.21% and 6.44%, respectively, in the previous month.
2021 saw the second most devastating wave of Covid-19 in the country, but it did not result in job losses of the same magnitude as the first wave, most likely because the second wave did not accompanied by a strict stop of economic activity. The latest spike appears to be linked to the Covid surge caused by Omicron, according to Yeshab Giri, chief commercial officer – staff at human resources consultancy Randstad India.
“Due to the increase in Omicron cases, many employees have completed a reverse migration to their hometowns. Restricted footfall in offices could be the cause of the blocking of the hiring plans of many companies in all sectors, ”said Giri, according to whom this is a temporary phase.
Meanwhile, a recent study found that the coronavirus has once again emerged as the main cause of concern around the world, due to the increasing spread of the omicron variant. For Indians, who believe the country is moving in the right direction, the pandemic is the third cause of concern.
“India is ranked 2nd in the pecking order for optimism, with Saudi Arabia leading the way with at least 86% of its citizens surveyed believing their country is moving in the right direction,” Research said.
The urban unemployment rate rose to 9.3% in December from 8.2% the previous month while the rural unemployment rate fell from 6.4% to 7.3%, according to the data. Among states, Haryana experienced the highest unemployment rate in December at 34.1%, followed by Rajasthan (27.1%), Jharkhand (17.3%, Bihar (16%), J&K (15%) and Tripura (14.7%) year, unemployment in India was highest in May 2021 when it rose to 11.84%.
In the years affected by the COVID 19 pandemic, the unemployment rate in urban areas reached 20.9% in the quarter from April to June 2020, more than double the unemployment rate in the same quarter of the year. previous year (8.9%). The new Omicron variant of COVID-19 has only worsened the unemployment rate. There is great uncertainty in the job market, and no one knows what will happen next, mainly because of Omicron.
With the sharp increase in the number of daily cases reported in India over the past few days, the economic recovery will face some disruption. But can the new variant have a severe impact on India’s economic recovery? Experts had said earlier that the new wave of infections triggered by the Omicron variant could start to subside by February before increasing rapidly. Key areas such as manufacturing and industrial activity are unlikely to face significant disruption due to the new borders. Thus, it may be safe to assume that the disruption caused by Omicron is only short-lived. Right now, basic indicators suggest that the economy is recovering steadily despite rising inflation and disruptions in the global supply chain.
In India, the issues of unemployment, financial and political corruption, and the coronavirus will require maximum attention to mitigate their impact. However, it is important to note that the downward trend in the unemployment rate was revealed in December, even before the closures related to the new wave began to occur.
By, Srishti Sahu