The unemployment rate in India bounced back in August and touched 8.3% compared to 7% in July with 1.9 million jobs lost in the country last month, mainly from the farm sector, the Center for Monitoring Indian Economy said.

This has led to a dip in the employment rate from 37.5% in July to 37.2% in August with absolute employment down to 397.8 million compared to 399.7 million in July, it said.

“The loss was essentially in farm jobs and reflects the seasonal nature of employment and uncertainty caused this year by an erratic monsoon,” CMIE said in its weekly analysis.

According to CMIE, employment in agriculture fell by 8.7 million in August while the non-farm jobs increased by 6.8 million at the same time. Of these, employment in the form of business persons increased by nearly 4 million and those in the form of small traders and daily wage labourers increased by 2.1 million. Salaried jobs increased marginally, by 0.7 million, during the month, it said.

As per CMIE, much of the labour shed by agriculture was absorbed in the services sectors. “On the contrary, the industrial sector shed jobs in the month with employment in the industrial sector in August 2021 being 2.5 million less than in July 2021. Further, the manufacturing sector shed 0.94 million jobs in August. “Factories, it seems, are not a reliable source of employment,” CMIE said.

CMIE further said that the services sector provided 8.5 million additional jobs in August with personal non-professional services and retail trade being the big absorbers of employment within the services sector in August.

While the increase in personal non-professional services was a significant 4.7 million, the jump in retail trade was 4.5 million. Personal non-professional services providers include house-maids, home cooks, beauticians, masseurs, gymnasium trainers, barbers, plumbers, gardeners, security guards, handy-men and such.

“Given that salaried jobs increased by only 0.94 million, most of these jobs in the retail trade industry are likely to be informal in nature,” it said, adding most of the gross increase in employment of over nine million in these two sectors was mostly informal.

As per CMIE, the manufacturing sector has permanently lost about 10 million jobs in the pandemic-induced lockdowns. Before the Covid-19 crisis, the manufacturing sector employed about 40 million which fell to 21 million in April 2020 and quickly climbed back to a level just short of 30 million by July 2020. Then the second wave brought employment in manufacturing down again to 26 million before recovering to nearly 29 million in July. But in August it slipped back to 28 million.

“This fall in August is disappointing. The fall of nearly a million jobs from the sector in August reveals how unreliable manufacturing jobs have become,” it said, adding the 40-million level that manufacturing was at before the lockdowns seems too distant now, almost out of reach.