Economic Survey: After rising sharply in lockdown days, unemployment rate fell as economy opened up

The Economic Survey 2022 has said that the as a result of COVID-19 pandemic and the consequent the nationwide lockdowns which impacted livelihoods globally, the unemployment rate for urban sector rose to 20.8 percent in India in the first quarter of 2020-21. However, following revival of the economy in the subsequent quarters of 2020-21, the three labour market indicators -- labour force participation rate (LFPR), worker population ratio (WPR) and unemployment rates (UR) -- showed a swift recovery. While the unemployment rate gradually dipped during this period to reach 9.3 per cent in Q4 of 2020-21, the unemployment rate for males as well as females, aged 15 & above, recovered to the pre-pandemic levels. Both the LFPR and WPR for males as well as females, aged 15 & above, reached almost their pre-pandemic levels during the last quarter of 2020-21, said the Economic Survey.

EPFO data suggests net addition to EPFO subscriptions declined and turned negative in April-May 2020, implying a net exit from the scheme. However, with the unlocking of the economy and easing of restrictions, EPFO subscriptions bounced back to 12.2 lakh in September 2020. It again fell in November and also during the second wave of COVID-19 (April-June 2021). However, latest payroll data shows that the net addition in EPF subscribers reached 13.95 lakh in November 2021. That’s a growth of 109.21 percent from November 2020, and a growth of 25.65 percent from October, 2021.

Data for demand for work under Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), an indicator of rural labour markets, showed that MGNREGS employment peaked during the nation-wide lockdown in 2020, demand for MGNREGS work stabilised post second wave, and aggregate MGNREGS employment is still higher than pre-pandemic level.