Home ›› 21 Jan 2023 ›› Asia Biz
Ravi Verma, hired by an electrical parts manufacturing firm early last year as India’s economy surged, was fired in November when the company lost several export orders. He has since remained unemployed, unable to pay back a 100,000 rupee ($1,224) loan he took to buy a two-wheeler scooter.
Verma is among thousands of Indian workers who lost jobs as the global slowdown hit exports, while the re-entry of nearly 20 million workers into the job market after the pandemic has aggravated the problem, reports Reuters.
The rising unemployment in India belies other indicators suggesting the economy is undergoing a healthy rebound from the Covid-19 pandemic. Instead, the surge in people looking for work, many of them rural migrants, raises concerns about consumption and longer term growth prospects.
“I have been looking for a job for two months,” Verma said, looking up from a Hindi language newspaper he was reading at a community centre close to his one-room home in the industrial town of Faridabad in northern India.
“I face a risk of loan default if I don’t get a job soon.”
The urban unemployment rate swelled to 10.1per cent in December, although the total number of jobs in India touched a pre-pandemic level of 410 million, data compiled by Mumbai-based think-tank Centre for Monitoring Indian Economy (CMIE) showed.
Urban unemployment spiked during the pandemic years, largely because of lockdowns, but before that it hovered between 6per cent-7per cent, according to CMIE data. Previously, it reached a high of 11.2per cent in August, 2016.
India’s rural and urban unemployment and labour participation rate in December 2022 India’s rural and urban unemployment and labour participation rate in December 2022
India’s rural and urban unemployment and labour participation rate in December 2022 India’s rural and urban unemployment and labour participation rate in December 2022
“Nearly 37 million workers were looking for work in December,” said Mahesh Vyas, managing director of CMIE, citing a rebound in labour force participation rate driven by the return of women workers and rural youth joining the labour market as fears of the pandemic eased.
That was the highest number of unemployed since June, 2021 at the height of the pandemic, he added.
Globally, India remains a “bright spot” amid growing fears of a recession in the United States and Europe, and the economy is projected to grow below 6per cent in the next financial year starting in April, down from estimated 7per cent growth in the current fiscal year.
But, hiring in export-dependent manufacturing sectors like engineering, textile and software has slowed as companies face a decline in overseas demand - reflected in falling exports of manufactured goods, down 12.2per cent year-on-year in December.
For Prime Minister Narendra Modi, unemployment is emerging as a major challenge along with high inflation, and could prove costly in state elections later this year and a general election in mid-2024, analysts said.
