At least 3.2 million salaried people lost their jobs in July despite the ebbing of the pandemic’s second wave and improved economic activity underscoring structural weakness in core sectors.
Some 76.49 million people were employed in salaried jobs by July-end, lower than the 79.7 million people in June, showed latest data from the Centre for Monitoring Indian Economy (CMIE).
Of the total salaried jobs lost, about 2.6 million are from urban India where the number of salaried people fell from 48.71 million in June to 46.15 million in July, showing that the formal sector job creation is still lagging and the recovery in the employment market remains weak.
Meanwhile, the number of small traders and wage labourers inched up to 30.42 million, or almost 2.4 million more than June, while 1.7 million more farmers joined the bigger pool of farmers in July.
Labour economists said structural weakness of the jobs market is a factor behind the job losses in July. Also, a shift towards self-employment, and retrenchment of temporary salaried workers and gig workers in sectors like retail trade and non-professional services contributed to the weak jobs scenario last month.
“Some people are shifting from non-farm jobs to more casual and self-employment opportunities. This is not an ideal situation but data is showing us this reverse trend recently and it got amplified due to covid-19 and the disruptions it caused in several sectors,” said Amit Basole, head of centre for sustainable employment at Azim Premji University.
Basole said while monsoon-led farm activity is active in July and may have attracted low-paying jobs in tourism and hospitality among sectors, the fact that July 2021 salaried numbers are far lower than July 2019 numbers in a pre-pandemic time suggests poor recovery and structural weakness in the labour market.
As per CMIE, while 76.49 million people had salaried jobs in July, the figure was 86 million in July 2019.
“This a huge gap and does not speak good about the formal sector job creation environment,” Basole said, adding that the scenario about the recovery and monthly fluctuations in jobs data will be clear in three to four months.
Consumer Pyramids Household Survey data of CMIE indicates that a V-shaped recovery is underway again after the second wave of covid-19 that struck India in April but it would be wise to wait for more data before reaching any conclusion on recovery, CMIE said in a post on its website.
In terms of overall numbers, 399.38 million people are employed in the country, both in salaried and non-salaried jobs at the end of July. This is almost 16 million more than in June, Mint reported on Monday. However, most of these additions were from agriculture, which absorbed 163.25 million people or little over 11 million more than in June. This was followed by the real estate and construction sector, which absorbed 5.5 million more people than in June.
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