india: India’s labour market metrics deteriorates in March as employment in construction, retail trade drops

india: India’s labour market metrics deteriorates in March as employment in construction, retail trade drops


India’s labour market metrics deteriorated in March on the back of a significant drop in employment in construction and retail trade as millions of workers moved to agriculture for harvesting of rabi crops, the Centre for Monitoring Indian Economy said.

According to CMIE data, while the unemployment rate climbed from 7.5% in February 2023 to 7.8% in March, the labour participation rate fell from 39.9% to 39.8% and the employment rate dropped from 36.9% to 36.7% in the same months.

CMIIE’s weekly labour market analysis shows that the labour markets have been weak especially during the last quarter of 2022-23. While the LPR fell from 40.5% in December to 39.8% in March 2023, the unemployment rate fell marginally from 8.3% to 7.8% while the employment rate fell from 37.1% in December 2022 to 36.7% by March 2023.

“This fall in the employment rate translated into a 2.6 million fall in absolute employment between December 2022 and March 2023,” it said, adding that most of this fall, or 2.27 million, was in March 2023 largely due to shifting of seasonal demand.

While employment in construction fell by 9.58 million in March, employment in retail trade fell by about 8 million, which is the largest fall in the industry since the second wave of Covid-19 in May 2021, it said.

However, agriculture saw a 17.23 million increase in employment in March, which is the highest recorded by CMIE since it started monitoring employment in 2016, it said.

“It appears that these large declines in employment in construction and retail trade are not necessarily a fall in the demand for labour in these industries but a likely seasonal shift of labour to farmlands in preparation to harvest the rabi crop,” CMIE said.As per the CMIE, nearly six million labourers moved out of allied activities, poultry, plantations and fishing into crop cultivation. “This is a clearer indication of movement of labour for harvesting the rabi crop,” it said.

“This massive movement of labour from one sector to another within short time intervals reflects the extraordinary mobility of labour in response to demand in India,” it said, adding that the substantial volatility of employment in this large labour-intensive sector renders large parts of the Indian labour vulnerable.



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