India entered the fourteenth day of a 21-day nationwide lockdown to curb the spread of COVID-19. India’s unemployment rate spiked to the highest level recorded in 43 months in March, even before the lockdown to curb the spread of the coronavirus pandemic, Mumbai-based think-tank Centre for Monitoring Indian Economy (CMIE) said. Between January and March, the labour participation rate has fallen an entire percentage point – from 42.96 per cent in January to 41.90 per cent in March, as the number of employed people fell from 411 million to 396 million, while the number of the unemployed increased from 32 million to 38 million, according to CMIE. The unemployment rate – or the share of jobless people in an economy – stood at 8.7 per cent in March – the highest since September 2016, climbing steeply from 7.16 per cent in January. The report comes as India entered the fourteenth day of a 21-day nationwide lockdown to curb the spread of the deadly coronavirus (COVID-19) pandemic. Even before the lockdown, which began on March 25, the country’s economy suffered from a prolonged period of slowing growth. For the financial year 2019-20, official estimates peg the annual expansion rate of GDP at 5 per cent – the slowest since the 2008-09 global financial crisis.
Earlier this month, Fitch Ratings said India’s GDP may expand 2 per cent in financial year 2021 – the slowest pace since the liberisation of the economy 30 years ago. Previously, Moody’s Investors Service had slashed its estimate of the country’s growth in 2020 to 2.5 per cent from an earlier estimate of 5.3 per cent, saying the coronavirus pandemic will cause unprecedented shock to the global economy.
“It (LPR) seems to have nosedived in March after having struggled to remain stable over the past two years. Then, there is a precipitous fall,” wrote Mahesh Vyas, head of the Mumbai-based think tank, in a post. “We had feared a fall in labour participation rate because of the national shutdown to contain the spread of coronavirus. But this fall seems to have happened even before the lockdown,” he added. “Of course, it gets much worse as we move into the lockdown.”