The number of employed in India jumped by one million in May taking the total number of employed in the country to 404 million and resulted in a drop in unemployment rates from 7.83% in April to 7.12% in May, the Centre for Monitoring Indian Economy said.

This is the second consecutive month of an increase in employment after an addition of seven million in April 2022, pushing up the employment rate marginally from 37.05%in April to 37.07% in May 2022.

“This suggests stability at the macro level and a positive movement of labour at the sectoral level,” CMIE said in its weekly labour market analysis.

According to CMIE, there was a big shift in employment from agriculture to industry and services in the last two months. Employment in agriculture declined by 5.2 million in April and another 9.6 million in May, taking the total dip in employment in Agriculture in the last two months to 14.7 million.

On the contrary, industry provided 15.6 million jobs and services provided another 7.2 million jobs over the last two months, resulting in 8 million net additional jobs in April and May.

“Industry and services harness labour more productively than agriculture and therefore there is reason to cheer this recent transition,” CMIE said.

CMIE data further shows that the absorption of additional labour within industry, is slightly in the favour of manufacturing compared to the construction sector.

Of the incremental jobs in industry during April and May 2022, 34% went to manufacturing compared to 32% in 2021-22 while the share of construction remained the same at 65% and the rest absorbed by utilities.

Manufacturing added 5.4 million jobs during April and May 2022, taking the total employment in manufacturing to 34 million. This is, though, highest since the pandemic but it is still lower than the over 40 million level of October-December 2019.

The construction sector industry added 10 million jobs during April and May 2022, taking the total employment to 72 million by May 2022. This is the highest in the industry in a long time.

The cumulative increase in employment in services sectors during April and May 2022 at 7.2 million, with the majority added in April.

“As India moves into its kharif sowing season in June, the demand for labour from agriculture is expected to increase. This could help lead to an increase in the labour participation rate and also the employment rate,” CMIE concluded.

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