“This big jump in the number of people who entered the labour force points at a possible increase in optimism about finding employment,” CMIE said in its weekly labour market analysis.
Out of the people who entered the labour force this month, close to 87% or 22.1 million were able to secure jobs taking the total number of employed to 429.7 million compared to 407.6 million in March, suggesting revival in the labour market.
As a result, the employment rate in the country also inched up by 1.91 percentage points to 38.57% in April, which is the highest recorded since March 2020.
However a smaller proportion of this additional labour force was left unemployed leading to an increase in the number of unemployed persons in the country by 3.4 million to 37.9 million in April compared to 34.5 million in March.
As per the CMIE, the increase in labour participation was significantly higher in rural India compared to urban India as majority of the jobs added in April were in rural India.
CMIE said around 20.3 million people entered the labour force in April in rural India resulting in a total of 321.2 million persons in the rural labour force and a 2.7 percentage point increase in the rural labour participation rate to 43.6% in April.
Out of this, around 19.2 million were able to find jobs in rural India which pushed up the rural employment rate 40.4% in April from 37.9% in March, which is the highest witnessed in the past three years while the unemployment rate in rural India inched down from 7.47% in March to 7.34% in April.
On the other hand, the urban unemployment rate increased to 9.8% as compared to 8.5% in the previous month mainly due to the 1.3 percentage point rise in the labour participation rate in April to 38.75%, it said.
“This translates to an expansion of the urban labour force from 141.2 million to 146.4 million in this period,” CMIE said, adding that out of the 5.2 million additional people in the labour force in April who were willing to work, 2.84 million were able to secure employment while over 2.3 million additional people became unemployed in urban India in the last month.
“Overall, headline metrics for the month of April suggest that the rural labour market fared well compared to the urban labour market in India with around 94.6% of the people who joined the rural labour force became employed as opposed to only 54.8% of the people who entered the labour force in urban India were able to find jobs,” it concluded.