India sees addition of 16M jobs in July, mostly in agriculture, construction sectors: CMIE

India witnessed an addition of 16 million jobs in July mainly in the agriculture and construction sectors. However, the number of salaried jobs fell by 3.2 million in the same month, according to the Centre for Monitoring Indian Economy (CMIE).

"India saw an addition of a massive 16 million jobs in July 2021. But, all the additional employment provided by India in July was of poor quality. 18.6 million additional people were employed as small traders and daily wage labourers," CMIE's MD and CEO Mahesh Vyas said in his analysis.

He said most of these were engaged in agriculture where 11.2 million additional people were employed.

The number of salaried jobs, which are mostly better quality jobs, fell by 3.2 million in the same month, Vyas said.

"The big jump in employment seen in agriculture in July is a reflection of the increase in sowing activities. Monsoon has been playing truant this year. This has delayed kharif sowing activities. By the end of June 2021, kharif sowing was more than 20 percent lower than it was in the corresponding period of 2020," Vyas observed.

By the end of July, he said, the sowing was less than 5 percent lower than a year ago. About 65.3 million hectares were sown during July, compared to 19.5 million hectares in June.

This could be the reason why the sharp increase in employment in agriculture is seen, he pointed out.

Vyas further noted that employment in agriculture usually rises in July and this seems to be a seasonal pattern.

"Often, the increase begins in June, peaks in July and sometimes remains elevated in August. This is the kharif time of sowing and post-sowing agricultural activities. Employment then rises again in November during the kharif harvesting season. Agriculture absorbs an additional 8-12 million persons in the month of July. In this year, the absorption in July was on the higher side at 11.2 million," he added.

This seasonal absorption of labour into agricultural activities is different from the large-scale migration of labour into agriculture as farmers, he stated.

He explained that this happens when other sources of employment start drying up as witnessed in 2020 during the pandemic. The rise of employment in the form of farmers seen in 2020 was mostly disguised unemployment.

"It is likely that as the kharif sowing season comes to an end, these agricultural labourers will lose this source of employment. The economy will need to provide adequate alternate sources of employment to this labour when the season ends," Vyas stated.

Of construction and manufacturing

In July, Vyas said, the construction sector absorbed an additional 5.4 million people, the manufacturing sector shed 0.8 million and the services sector could absorb only an additional half a million.

Meanwhile, the relatively better quality jobs fell in July, Vyas said, adding that salaried jobs, at 76.5 million in the month, were 3.2 million less than they were in June.

These were also 3.6 million short of the pre-second wave level of 80 million in January-March 2021, he said.

"Compared to the pre-pandemic times when salaried jobs were of the order of 87 million, the fall is much larger at over 10 million. The several lockdowns since April 2020 and their debilitating effects on the economy have cost the salaried job workers the most," he pointed out.

He said as the salaried jobs are not as elastic as the employment of a daily wage labourer, it is difficult to retrieve a lost salaried job.

As a result, the cumulative impact of the steady loss in salaried jobs during the several lockdowns and their after-effects is much worse, he said.

"Until investments do not pick up, it may be difficult to see most of those 10 million salaried jobs lost since 2019-20 to come back. This could be the biggest hurdle to India's recovery," Vyas said.