India unemployment soars to 23% amid pandemic lockdown
NEW DELHI, NNA - India’s unemployment rate shot up to over 23 percent in early April following health-ordered shutdowns across the country to curb the deadly coronavirus outbreak from spreading.
The jobless rate that hovered around 6 to 8 percent before the crisis jumped sharply to as high as 31 percent in urban centers after businesses and offices were ordered to stop operating during a 21-day lockdown, brokerage firm Nomura Securities Co., Ltd. said in its latest report, citing data from the Centre for Monitoring Indian Economy (CMIE), a private agency.
“The unemployment rate in rural India rose to 20 percent, and to 31 percent in urban India, indicating that while the outbreak started off as an urban phenomenon, the economic impact is also being felt in rural areas,” Nomura said in the report released Tuesday.
The biggest coronavirus shutdown in the world mandated 1.3 billion people to stay indoors. Millions such as casual workers who were left jobless had to flee cities to return home in the countryside for food and shelter.
The Noruma report also noted that the labor force participation rate, which measures active workforce, fell to 36 percent from pre-crisis 42 to 43 percent.
The labor force shrank to 434 million in March, down by 9 million from January figures.
Nomura stressed that the deteriorating labor statistics are a direct consequence of the national lockdown which began on March 25. It witnessed a mass exodus of laborers from urban centers to their rural hometowns, especially in the northern part of the country.
Nearly 52 percent of Indian workers are self-employed while around 23 percent are casual workers.
“We expect unemployment to remain elevated, with a potentially longer period of lockdown and larger growth damage,” Nomura said.
Kuldeep Janghu, a local labor union leader in the northern Indian city of Gurugram, an industrial hub in the state of Haryana, told NNA that most of the workers, especially those in real estate and garment sectors, have become jobless.
“If the lockdown continues, more workers would lose jobs,” he said in a phone interview.
KPMG Global Services, a unit of accounting firm KPMG, has stopped hiring in some of its divisions in various countries, including India.
KPMG headquarters in Britain “has already given us a mandate to freeze hiring”, according to a March 23 email addressed to its executives in India and elsewhere.
“GCM (Global Clients & Markets division) has also frozen budgets and hence we will not be hiring for additional open roles anymore at the moment,” according to the email.
A senior executive of KPMG Global Services, who spoke to NNA on condition of anonymity, said the company has put on hold pay hikes, bonuses and promotions as well.
The lockdown is set to end next week. However, the government is still deciding whether it should be lifted totally or partially as recommended by an advisory panel, according to local news reports.
As of Wednesday, according to the Ministry of Health and Family Welfare, the country has recorded 149 deaths and 5,274 confirmed cases of COVID-19, the name of the novel coronavirus that is wreaking havoc around the world.