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Joblessness in at least 12 states and Union territories has been stubbornly defying a declining national trend, with eight of them reporting double-digit unemployment rate in September, reflecting parts of the economy that have been left sputtering by the covid pandemic.

In Delhi, the unemployment rate is at a four-month high of 16.8%, according to data for September from the Centre for Monitoring Indian Economy (CMIE).

Of the others with double-digit figures, Rajasthan has an unemployment rate of 17.9%, Haryana 20.3%, Jammu and Kashmir 21.6% and Bihar, Tripura, Jharkhand and Puducherry between 10% and 15.3%.

To be sure, the trend is mixed.

The outliers
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The outliers

Delhi’s unemployment rate has been rising continuously for the past three months. It was 8.8% in June, 10.7% in July and 11.6% in August before jumping 5.2 percentage points.

In Jammu and Kashmir, the September rate was 8 percentage points higher than in August. In fact, the September numbers mark an eight-month high. Puducherry reported a 3 percentage point growth in joblessness sequentially. In Himachal Pradesh, the unemployment jumped 5 percentage points to 8.7% in September. In Punjab, it jumped 3.3 percentage points to 9.3%, and in Kerala it climbed 1.1 percentage points. In Tamil Nadu, the unemployment rate inched up to 7% from 6.3% in August.

Although Haryana has a joblessness rate of 20.3%, this figure actually marks a decline from 35.7% in August. Similarly, in Rajasthan, the 17.9% rate in September is 8.8 percentage points lower than in August.

For the last few years, India has been facing a tough jobs environment, which worsened after the pandemic’s outbreak. After the national lockdown last year, India’s unemployment rate crossed 20%. This has fallen below 7% now, but in a large labour market like India’s, a 7% national unemployment rate and 8.62% urban joblessness is considered high and worrisome.

Economists and experts said subdued revival in some core manufacturing sectors such as auto, as well as battered tourism and hospitality sectors, and a less active agriculture season in September contributed to the sticky double-digit unemployment in these states.

“While the IT and ITes sector is showing an increasing hiring promise due to their acceptance and adoption across sectors, the growth in financial services comes along with increased economic activities. But several core sectors such as trade, textiles and apparel, automobile, cement are still struggling," said K.R. Shyam Sundar, a labour economist and a professor at XLRI Jamshedpur.

“The hospitality and tourism sector is still very subdued. The agri season enters a less active phase during this month, and the fear of a third wave is still looming. Al together, you would realise why some of the states are still reporting high numbers. Besides, the gradual return of people from rural areas to cities must have contributed to the spike in unemployment in cities like Delhi," Sundar argued.

A nuanced analysis shows that while IT, financial services and food processing have added sizable jobs, textiles shed about 1 million jobs in September; and cement, tiles and glass, and bricks together shed over 1.5 million employees. Likewise, automobiles and transport shed 350,000 jobs in September.

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