Increased government spending on the rural jobs programme has also aided returnee migrants
The urban job loss rate fell nearly 2 percentage points to 11.19% in the week ended 21 June over the previous week
The timely arrival of the monsoon has given a much-needed boost to rural employment, absorbing thousands of migrant workers who have returned to their rural homes in seasonal farm jobs.
The rural unemployment rate continued to drop, falling to 7.26% in the week ended 21 June from 10.96% in the previous week, according to data released by the Centre for Monitoring Indian Economy (CMIE). The job loss rate has now dropped to the lowest level in three months, even lower than the week preceding 25 March, when India first went into a stringent lockdown.
The exodus of migrant workers from cities had raised fears of rampant joblessness in rural areas. But those fears have proved to be exaggerated as the timing of their return coincided with the summer crop planting season, opening up seasonal job avenues. Increased government spending on the rural jobs programme has also aided returnee migrants.
“A good sowing season is helping the rural employment environment. There is distressed employment in rural areas; hence, labour force participation is going up," said Aroop Mitra, a professor of economics at the Institute of Economic Growth in New Delhi. Additional spending by the Centre and states in schemes such as the employment guarantee scheme and the new jobs scheme to offer informal work to migrants has also helped, Mitra said.
While the employment rate in rural areas has seen a steady pickup since the government eased lockdown curbs, urban India continues to see higher joblessness as cities struggle to contain rising coronavirus infections.
The urban unemployment rate continued to hover above the 11% level, partly because of the impact of rising infections in Delhi, Chennai and Mumbai, and as companies fired people to save costs. The urban job loss rate fell nearly 2 percentage points to 11.19% in the week ended 21 June over the previous week.
India’s overall unemployment rate was, however, lower at 8.48% in the week to 21 June, a drop of more than 3 percentage points from the previous week. In the pre-lockdown week, India’s overall job loss rate was 8.41%.
Economists said the opening up of the rural economy, good progress of the monsoon and a robust sowing season are aiding the employment pickup.
“Other than unlocking, we are seeing a good rainfall and the sowing season has been very good," CMIE managing director and chief executive Mahesh Vyas said, adding there are reports of a 30% increase in acreage this sowing season.
“The extra allocation of funds for MGNREGA and the Garib Kalyan Rojgar Abhiyan are aiding employment creation in rural areas," Vyas said.
But in urban areas, experts said, a revival in job creation will take much longer. “The unlocking will slowly absorb people in urban areas but there is a fear factor due to rising covid cases. Creation of formal jobs will take time," said Mitra.
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