According to data released by the Centre for Monitoring Indian Economy(CMIE), India’s unemployment rate jumped to 8 per cent in April.
Last month the second wave became more contagious impacting many parts of Asia’s third-largest economy.
The overall rate of unemployment in March 2021 was 6.5 per cent while the urban unemployment in India is now nearing 12 per cent, the highest in more than 10 months.
While the labour force shrank by 1.1 million in April, the count of the total employed fell by around 7.35 million last month, although there is no nationwide lockdown currently like last year, micro lockdowns have been announced by many states to curb the spread of the virus.
Some economists believe lockdowns by states which is equal to a quasi-national lockdown will put further pressure on the job market with prospects for jobs bleak during the year as the second wave of COVID-19 impacts economic recovery.
Professional forecasting agencies have already scaled back their GDP growth projections for the year.
Earlier on Tuesday, rating agency Moody’s investors’ service had slashed its F22 growth forecast for India to 9.3 per cent from 13.7 per cent estimated earlier, joining others, including Nomura which also cut projection from 12.6 per cent to 10.8 per cent.
A Reuters report said India’s inflation had eased to a three-month low last month as food costs rose slowly even as several parts of the country went into lockdown due to a surge in virus cases.
Annual retail inflation rose 4.29 per cent, down from 5.52 per cent in March, the Reuters report said as food prices rose 2.02 per cent compared with 4.87 per cent in the previous month.
Amid the ravaging second wave, the Retailers Association of India (RAI) said workers and businesses need urgent support due to restrictions imposed in the aftermath of the virus surge.
“Retailers need to pay salaries, minimum electricity, rentals, property taxes, etc. Even if the businesses are shut due to lockdown. The cash inflow of the industry has come to a standstill, while the fixed operating costs remain intact,” RAI said in a statement.
“Millions of MSME (Micro, Small & Medium Enterprises) suppliers too get no payment from the industry participants,” it added.