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Govt is turning a Nelson’s eye to sinking economy

Despite the smaller numbers, the unemployment rate still shot up to 8% compared to 6.5% in the previous month.

Published: 12th May 2021 08:55 AM  |   Last Updated: 12th May 2021 08:55 AM   |  A+A-

Recession, Economy, Loss

EXPRESS ILLUSTRATION

The data on jobs for April is in, and it is not a pretty picture. The pandemic’s rampage was at its peak last month, and the continuing lockdowns have taken a heavy toll. Employment numbers have been worse than expected. The Labour Participation Rate (LPR)—the number of people who are available for employment as compared to those who have given up and left the labour market—dropped sharply in April to 39.98%, the lowest level since May 2020. The Centre for Monitoring India Economy (CMIE) said the LPR fell for a third straight month as state after state, attempting to combat the transmission of the virus, imposed full-scale or partial lockdowns. 

In sheer numbers, the labour force in April shrank by 1.1 million to a total of 424.6 million, compared to March. Despite the smaller numbers, the unemployment rate still shot up to 8% compared to 6.5% in the previous month. CMIE data further showed that the cream of the workforce—salaried employees—lost 3.4 million jobs in April; and over three months, February to April, job losses totalled a whopping 8.6 million. Sadly, the farm sector accounted for 70% of the jobs lost. It is a double whammy. Besides the hit of the pandemic, April is a lean month between the rabi and kharif seasons.  

It is unfortunate that the writing on the wall is lost to government pundits. With daily infections still exceeding 3.5 lakh a day, and India expected to touch a million Covid deaths by August, it was indeed jarring to hear Finance Minister Nirmala Sitharaman tell a meeting of industrialists in Kolkata two weeks ago: “2020 was about Covid, but 2021 shall not be about Covid, in spite of the second wave. I want to assure you.” Pointing to the steps taken by the government, she said, “Revival was happening, is happening and will continue to happen.” The truth is vehicle registrations are the lowest in nine months, and dozens of auto plants have laid off labour and shut their assembly lines for temporary periods. And one has a sinking feeling that the worst is yet to come.



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