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Unemployment rate dropped to 6.5% in January 2021: CMIE data

Most employed persons in India do not have regular jobs. Their employment on any given day depends upon the state of the economy, the local environment, business conditions at large and a fair degree of luck.

February 18, 2021 / 07:26 PM IST

The unemployment rate in the country fell to 6.5 percent in January 2021 from 9.1 percent in December 2020 and the employment rate rose to 37.9 percent from 36.9 percent in the same period, according to Centre for Monitoring Indian Economy (CMIE) data.

In January 2021, India recorded a significant fall in the unemployment rate and an equally impressive increase in the employment rate, the report observed.

Nearly 12 million additional people found employment during January with the number of employed persons increasing to  400.7 million in January 2021 from 388.8 million in December 2020. This is the biggest jump in the workforce addition in a month since the onset of the lockdown.

The total unemployed who were willing to work but did not have any employment in January 2021 was 40 million. While this is a large number, it is the lowest in over two years, the report noted.

CMIE data also showed that the rise in employment in January reduced the number of unemployed to 27.9 million.

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"These are the unemployed who are willing to work and who are actively looking for employment. This is an exceptionally low number. On an average, 33 million persons who were willing to work and were looking for work were unemployed in 2019-20. This is now down to less than 28 million," it said.

As per the report, the unemployment rate has been volatile in the past six months ranging from a low of 6.5 percent in November 2020 to a high of 9.1 percent in December 2020. The average unemployment rate during this six-month period stood at 7.4 percent.

Volatility was much higher during the lockdown. But, volatility during these times was the result of an external shock. The high monthly volatility of unemployment in normal times reflects the high proportion of informal employment in India. A person could be employed on one day and not on the next or vice versa, it said.

Most employed persons in India do not have regular jobs. Their employment on any given day depends upon the state of the economy, upon the local environment, business conditions at large and a fair degree of luck, CMIE report noted.

The report stated that employment in India is still lower than it was before the lockdown, but there are lesser unemployed people willing to work as well.
Shreeja Singh
first published: Feb 18, 2021 07:26 pm

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