Urban Unemployment Remained Elevated In July-September 2020, Shows Government Data

Workers during the construction of a 1,000-bed non-critical hospital for Covid-19 treatment at the Bandra Kurla Complex exhibition ground in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

Official statistics coming in are slowly helping piece together the impact of the Covid-19 pandemic on jobs. The information paints a picture of higher unemployment in urban areas which lingered at least in the first half of 2020-21, when the nation remained under lockdown.

On Monday, the government released the Periodic Labour Force Survey for the quarter ended September 2020. The quarterly data, which covers urban areas, showed some improvement in employment conditions after the immediate hit taken in the preceding quarter but recovery remained incomplete.

Unemployment Rate

Unemployment rate remained elevated during July-September last year as the country remained under significant restrictions.

For men and women, above the age of 15, unemployment rate during that time was 13.3%.
Women fared worse than men. The unemployment rate for men was at 12.6% while it was higher at 15.8% for women.

While the unemployment rate eased compared to between April and June, when the Covid-19 crisis first hit India, it remained well above pre-pandemic levels.

The unemployment rate in the 15-29 age group remained far higher at 27.7%. However, for this category, unemployment eased from nearly 35% in the three months through June 2020.

Self-Employment Remained Elevated

A break-up of the categories of employment showed that more people remained in self-employment even in the quarter ended September 2020. However, the sharp jump in self-employed persons in urban areas seen in the preceding quarter eased in the subsequent three months.

Availability of work in the casual labour segment improved during the three months ended September.

Labour Force Participation Rate Improved

The quarter ended September saw the labour force participation rate—defined as the percentage of population in the labour force—rise after a sharp fall in the three months through June 2020.

This indicator moved back to pre-pandemic levels in the July-September period.

More Workers Moved Back To Agriculture

In terms of sectors, more workers had to move back to work in agriculture as employment, particularly in tertiary or services sectors, fell. About 6% of workers from urban areas worked in agriculture.

More significantly, the annual periodic labour force survey for July 2019- June 2020, which covers both urban and rural workers, showed a more significant move toward agriculture.

In 2019-20, 45.6% of workers, urban and rural, were involved in agriculture. This is a sharp increase from the 42.5% who depended on agriculture in the previous year.