India’s labour force increases by 8.8 million in April, one of the largest monthly rises

The 8.8 million increase in the labour force in April comes after a 12 million fall in labour market during the preceding three months when labour moved out of the labour markets during January-March.

However, employment expanded by 7 million in April 2022, which was higher than preceding months but was inadequate to absorb the sudden surge in demand for work.

“This is also an extraordinarily large increase and comes after three consecutive months of decline in employment,” CMIE said in its weekly labour market analysis.

Employment had fallen by 10 million from 406 million in December 2021 to 396 million in March 2022. In April, it recovered part of this fall to reach 403 million.

The high surge in the labour force coming back and inadequate employment opportunities resulted in 1.8 million increase in the count of the unemployed in the month pushing the total number of unemployed to 34.2 million.

“As a result, April also saw an increase in the number of people left unemployed and the unemployment rate inched up a bit compared to its level in March,” CMIE said in its weekly labour market analysis.

As per the CMIE, unemployment stood at 7.83% in April compared to 7.57% in March.

According to CMIE, the increase in employment in April was in industry and in services. While industry added 5.5 million jobs, services added another 6.7 million jobs in April. The agricultural sector, however, shed 5.2 million jobs on the back of winding up of the rabi season and decline in wheat production.

Within industry, 3 million jobs were added in manufacturing and construction added nearly 4 million. Mining and utilities, however, reported sharp declines in employment, probably coinciding with the coal shortages and the consequent stress in the power sector in India.

The increase in employment in industry and services was, however, not of good quality jobs. As per the CMIE, the increase in employment was largely among daily wage labourers and small traders while there was almost no change in salaried jobs.