At least 5.46 million Indians lost jobs in October: CMIE data

The good news is the employed people universe expanded by over 712,000 in urban India in October over September as economic activities opened up in cities and urban centres. But rural India faced a sizable fall of more than 6 million workers in both formal and informal jobs, CMIE data showed.

Among sectors, while industries have shed almost 7 million people in October as against September, largely driven by a fall in real estate sector employment, the buoyancy in the service sector has saved the day in the jobs market.

Experts and economists argue that the job market is giving a mixed signal- while urban job market is recovering, rural is struggling badly off late.

“Urban job market is on a recovery path and we are seeing buoyance in IT, retail trade and textiles etc. The general sectoral demand as well as the festive season is driving this positive change. But the rural labour market is facing shortfall in agriculture jobs, non-farm jobs and a stretch in the national rural employment guarantee scheme. This must have brought down the number of people employed in October,” said K.R. Shyam Sundar, a labour economist and professor at XLRI, Jamshedpur.

Sundar, however, said a better GST collection, consumption cycle in Oct-Dec quarter, high demand in technology and education sector opening up collectively indicate the positive side. “The service sector is the key for now but it will be crucial how the economy performs in the Oct-Dec quarter and that will pave the way for job market revival (or not) in 2022,” he argued.

In sync with what Sundar said, CMIE data showed that the service sector employment has grown to 154.6 million in October as against 149.22 million in September. And the job creation is spread over several key sub segments of the services sector.

For example, the IT and ITes segment, which is witnessing a visible demand in past few months has added over 400,000 people in October over the September numbers. By end of October, 2.19 million people were there in the IT and ITes sector, according to the CMIE data. Similarly, the retail trade has shown a sizable growth by adding over 3 million people and personal nonprofessional services segment has added 1.77 million more people in October, CMIE data showed. Similar there is growth in employments in sectors like education, media and publishing sub segments.

But wholesale trade and financial services sub sectors saw employers shedding workforce in good numbers.

In the manufacturing sector, segments like textiles, automobile and transport manufacturing, chemical industries, metal, gems and jewellery among others saw job creation in good numbers. But food industries saw employment loss of over 2 million people in October over September.

“This is bothersome…we have to see over the next two to three months whether sectors like financial services, wholesale trade and food industries are recovering or not,” Sundar added.

CMIE pegged the national unemployment rate at 7.75% in October as against 6.86% in September. Job creation has been a prickly issue in India for past few years and it got stretched further after the outbreak of the coronavirus pandemic.