Laborers on a production line at the Aqualite footwear factory in Bahadurgarh in the northern Indian state of Haryana in May 2020, after the government eased a nationwide Covid-19 lockdown. Photo: AFP

While India’s economy is showing signs of recovery, unemployment levels continue to remain high. In December it touched a four-month high of 7.91%, according to data from the Centre for Monitoring Indian Economy, a private research firm.

This is the highest since August (8.3%) and in November it was 7%.

Employment figures in both urban and rural areas deteriorated in December. The urban unemployment rate was 9.30% in December, against 8.21% in November, while the unemployment rate in rural areas stood at 7.28%, from 6.44% the previous month.

CMIE Managing Director and CEO Mahesh Vyas said that in December 2021, the number of jobs increased but the number of jobseekers was even higher, the Press Trust of India reported. “This is a good sign as the influx into the labor market was high. Around 8.3 million additional people were looking for jobs. However, four million jobseekers got employment,” he said.

However, it needs to be noted that this rise in unemployment happened when the number of Omicron – the new Covid variant – cases in India was small, and states had not imposed any curbs. Now that Covid cases are on the rise and various states are imposing curbs, the employment situation is expected to deteriorate and may even affect the country’s economic recovery.

On Monday, India reported 33,750 fresh Covid-19 cases and 123 deaths. The country’s active caseload stood at 145,582. The Omicron tally in the country has reached 1,700, with Maharashtra state, where the financial capital Mumbai is located, topping the count with 510 cases, followed by New Delhi with 351 cases.

Health experts predict that soon the number of those infected by Omicron will exceed other Covid variants, as it spreads rapidly and vaccines are less effective against this strain.

Many states have already closed schools, colleges, gyms, swimming pools and parks to curb the spread of the virus. However, it is unlikely that India will impose a strict nationwide lockdown as it did last year because it took a heavy economic toll.

The Retailers Association of India (RAI) has urged the government to consider a partial or total lockdown of retail businesses only as a last resort, in case of extreme strain on healthcare infrastructure. It said that ensuring economic health and continuity of employment was as important as saving lives.