What’s should be your strategy for primary market in FY25?

Over 15 lakh people lost their jobs across the formal and informal sectors in August, as unemployment increased in both rural and urban India. This has reversed the marginal gain in employment in July, according to the Centre for Monitoring Indian Economy.

As per CMIE data, the rate of unemployment shot up once again in August, and the total number of employed people fell to 39.77 crore from 39.93 crore in July, with close to 13 lakh job losses solely in rural India. The national unemployment rate spiked to 8.32% in August from 6.95% in July, the data showed.

India saw an addition of 1.6 crore jobs in July this year but the number of salaried jobs fell by 32 lakh in the same month.

Unemployment: Urban vs Rural

The unemployment rate in urban areas in August stood at 9.78% as compared to 8.3% in July, 10.07% in June, 14.73% in May, 9.78% in April and 7.27% in March, just before the devastating second wave of the COVID-19 ravaged India. Rural unemployment was at 7.64% in August as compared to 6.34% in July, which could be primarily attributed to low sowing during the Kharif season, according to CMIE.

There was a marginal hike in the labour force participation in August which hinted at the availability of a larger pool of people for the job market. However, there was a dip in the employment rate for the same period.

In August, 3.6 crore people were actively looking for work as compared to 3 crore in July, CMIE data showed.

The total labour force in August went up by close to 40 lakh and stood at 43.38 crore, highlighting how more and more people were looking for employment. The CMIE data showed that the size of the labour force in August was almost equal to the one of March 2020, just prior to India going into a nationwide lockdown that shrunk the job market due to the closure of businesses.

According to experts, the labour market struggle is expected to continue for a few more months. Recovery of good quality jobs will take time as the formal sectors are yet to resume hiring on the full scale.

“The economy is slowly recovering, at least the FY22 first-quarter GDP data shows, but it’s on a low base. With the festive season, you will see some uptick in coming months, but a decent jobs recovery will depend on the economy, market demand and if we can manage to stop the third wave of the pandemic,” the Mint reported quoting labour economist KR Shyam Sundar.