People of the country drastically lost jobs in October: why?

Over 50 lakh people lost their jobs in India in October 2021. In this month of the year 2021, more than 50 lakh people employed in the formal and informal sectors lost their jobs. According to monthly data released by the Center for Monitoring Indian Economy (CMIE), the number of employed people in October stood at 400.77 million, down from 406.24 million recorded in September 2021.

The employment rate continued to fall month-on-month in October as compared to September. Along with it, the labor force participation rate continued to fall too. The national labor force participation rate (LFPR) stood at 40.66 percent in September. But came down to 40.41 percent in October. However, the LFPR in August was 40.52 percent. On a brighter note, the universe of employed people in urban India expanded to over 7,12,000 from September to October. This happened as economic activity opened up in cities and urban centers. At the same time, however, rural India suffered a massive drop of over 6 million workers in both the formal and informal sectors, CMIE data showed.

About 7 million people lost their jobs in the industry in October compared to September. This happened mainly due to the lack of employment in the real estate sector. Also, there was an increase in jobs in the service sector during the period under review. Among sectors, industries have cut out almost 7 million people in October as against September. They were largely driven by a fall in real estate sector employment. However, the buoyancy in the service sector has saved the day in the jobs market. Experts and economists argue that the job market is giving a mixed signal. On the other hand, the urban job market is recovering, rural are struggling badly off late.

Urban job market is on a recovery path and we are seeing buoyance in IT, retail trade and textiles, etc. The general sectoral demand as well as the festive season is driving this positive change. But the rural labor market is facing a shortfall in agriculture jobs, non-farm jobs, and a stretch in the national rural employment guarantee scheme. This must have brought down the number of people employed in October,” said K.R. Shyam Sundar, a labor economist, and professor at XLRI, Jamshedpur.

Sundar, however, said a better GST collection, consumption cycle in Oct-Dec quarter, high demand in technology and education sector opening up collectively indicate the positive side. “The service sector is the key for now but it will be crucial how the economy performs in the Oct-Dec quarter and that will pave the way for job market revival (or not) in 2022,” he argued.

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