Joblessness at pre-covid level as India unlocks more

India’s overall unemployment rate fell to 7.43% in July from 10.99% in June, and even lower than the March figure of 8.75%, according to a survey by the Centre for Monitoring Indian Economy (CMIE).

With coronavirus cases soaring in March, India went into a stringent lockdown beginning 25 March to curb infections, triggering misery and mass unemployment.

Among states, Odisha and Gujarat had the lowest unemployment rate of 1.9% each in July, followed by Meghalaya (2.1%). Haryana had the highest unemployment rate of 24.5%, followed by Delhi 20.3% and Himachal Pradesh 18.6%, the CMIE data released on Tuesday showed.

Rural unemployment fell to 6.6% in July from 10.52% in June; however, urban unemployment rate at 9.15% in July against 12.02% in June remained stubbornly above both national and rural figures. According to CMIE, urban joblessness was 25.79% in May and 24.95% in April. In contrast, nationwide joblessness was 7.16-8.19% between August 2019 and February 2020.

The fall in the unemployment rate is largely attributed to a good monsoon and better sowing season in rural India as well as the gradual opening of most activities, including self-employment, in both rural and urban centres.

“The improvement in the unemployment rate is largely contributed by the rural sector and, in urban areas, it is slowly catching up. Yes, there is an improvement as the country unlocked across activities post-June, but one must realize that it may not be reflecting the ground realities like distress employment, low productivity and lower income growth of workers because more people are doing a job which was earlier done by fewer number of them," said Arup Mitra, a professor of economics at the Institute of Economic Growth in New Delhi.

“Decent jobs and formal sector job creation are very slow as the pandemic has hit businesses and recovery will take time. Demand from the market has been subdued in the past few months. Rural India is showing some growth in demand, but it will be a long process," Mitra added.