economy | IST

9 million jobs lost since last year, says CMIE's Mahesh Vyas; warns manufacturing investment deplorable

While the unemployment rate in India fell to a four-month low in July, at least 32 lakh people lost their jobs, despite improvement in economic activity, revealed the latest data from the Centre for Monitoring Indian Economy (CMIE). The data shows 9 million jobs have been lost since last year and the recovery has been very shallow. Mahesh Vyas said, “There was an expectation that July will end with good numbers. So the weekly numbers that we track, through the month of July, we were seeing an increase in the labour participation rate, a drop in the unemployment rate, and the employment rate which matters the most was rising. So the expectation was that in July, jobs will get added and they did get added.”

While the unemployment rate in India fell to a four-month low in July, at least 32 lakh people lost their jobs, despite improvement in economic activity, revealed the latest data from the Centre for Monitoring Indian Economy (CMIE). The data shows 9 million jobs have been lost since last year and the recovery has been very shallow.
Mahesh Vyas said, “There was an expectation that July will end with good numbers. So the weekly numbers that we track, through the month of July, we were seeing an increase in the labour participation rate, a drop in the unemployment rate, and the employment rate which matters the most was rising. So the expectation was that in July, jobs will get added and they did get added.”
“But what is significant is that on Saturday, jobs went down by 3.2 million. So what it looks like is, while July looked promising because all the ratios were moving in the right direction, what actually happened is that most of the jobs were temporary in nature,” he further explained.
On salary jobs, Vyas said, “There seems to be a secular decline that the economy has not come out of. So, salary jobs compared to let us say, 2010-2020, so pre-pandemic, if you look at things from there, we are more than one and a quarter year since the pandemic hit us. We see that we have lost 9 million jobs since then. A lot of the jobs which were lost earlier have come back, but salaried jobs have not come back.”
Vyas also pointed out that people who are losing jobs in urban centres, in industrial manufacturing, in particular, are going back to their farms, that is reverse migration. So for a long time now, we have been seeing a steady, small decline in salaried jobs, and a steady increase in jobs in agriculture.
He added, “So 9 million jobs lost, but 10 million salaried jobs lost, which means that farming sector is gaining jobs, people are leaving these jobs and going there. So, what is happening is that the recovery is very shallow.”
On investments, Vyas said, “The worrisome part is that investments are not happening and there is no reason for investments to happen. The government is not spending. So, if the government doesn't spend, as the private sector does not spend, there is no way in which salary jobs, which will last can come back. That is the problem.”
He added, “In the industrial sector, the investments into the manufacturing sector have been pathetically low. Most of the companies, the large companies are investing largely into automation and the use of low labour. India does not invest adequately in labour-intensive jobs, particularly low skilled labour-intensive jobs. As a result, people are moving back to the farms and that is actually disguised unemployment.”
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