Labour indicators recorded a sharp, all-round improvement in 2020-21 (July-June) compared with the previous three years, data released by the National Statistical Office (NSO) on Tuesday showed. The focus on the rural employment guarantee scheme by the government seems to have contributed to the fall in joblessness.
The first wave of the pandemic ebbed by July 2020, and the second wave surfaced in April 2021 and peaked in May.
According to the fourth annual report on the Periodic Labour Force Survey (PLFS) conducted during July 2020 and June 2021 by the NSO, the unemployment rate fell to 7.5% in the current weekly status (CWS, unemployment over the past week) in the period from 8.8% in the previous two years and 8.9% in 2017-18. Unemployment rate is defined as the percentage of persons unemployed among the persons in the labour force.
According to the fourth annual PLFS report, the labour force participation rate (LFPR), or those working or seeking or available for work in the labour force, was the highest in four years at 39.3% in 2020-21, as was the worker population ratio (WPR) at 36.3%. WPR is defined as the percentage of employed persons in the population. The higher LFPR indicates that people are not despondent with the job market.
However, according to the usual status (US, unemployment over the past year), the joblessness rate in 2020-21 was lower at 4.2%. Labour force participation rate and the worker population ratio increased to 41.6% and 39.8%, respectively, in 2020-21 compared with the previous three years as per the US method. CWS is closer to the global norm.
NSO launched the PLFS in April 2017. The first annual report (July 2017-June 2018) was released in May 2019, the second (July 2018-June 2019) in June 2020 and the third (July 2019-June 2020) was released in July 2021. When the results of PLFS 2017-18 was out in 2019, showing unemployment at a 45-year high of 6.1%, a row erupted — while the Opposition cited the data to put the government in the dock, the later said the PLFS wasn’t strictly comparable with the outcomes of the exercise done by the NSO previously. The PLFS is based on stratified random samples.
The first wave of the pandemic hit the country in March-April 2020. According to Centre for Monitoring Indian Economy (CMIE), the monthly unemployment rate for July 2020 was 7.4 % which rose to 8.35% in August, 6.68% in September, 7.02% in October, 6.5% in November and 9.06% in December 2020.
Between January and April 2021, the unemployment rate hovered between 6.5% and 7.97%, but went up to 11.84% as the second wave of the pandemic hit. In June last year, the unemployment rate, according to CMIE, was 9.17%.
For the fourth annual PLFS report, a little over 0.1 million households and 0.4 persons, both in urban and rural areas, were surveyed.
The data showed the jobless rate for both male and female in both CWS and US status fell in 2020-21 compared with the previous three years. The LFPR and WPR also comparatively improved during the year.
The government says the CMIE data doesn’t give true picture of the job scenario due to limitations of the survey. However, given the absence of high-frequency official data, the CMIE data do serve the purpose of gauging the employment-unemployment scenario in the country.