Home >News >India >June unemployment rate eases to 11% from 23.5% in May

NEW DELHI: India's unemployment rate fell to 10.99% in June from 23.48% in May, Centre for Monitoring India Economy (CMIE) said in its monthly data. The decline is largely in sync with the trend seen in the week-on-week data.

The June data is reflective of the resumption in activities as India unlocked its economy from 1 June and continued to open up several sectors. Self-employment avenues opened up and the pace of khariff sowing picked up following good progress of monsoon.

Job loss rate in rural India was 10.52% in June, down from 22.48% in May, while urban unemployment was 12.02% in the month as against 25.79% a month ago.

However, these numbers are still higher than those recorded in March and February. The overall job loss rate was 8.75% in March and 7.76% in February. The spike in covid-19 cases in India and the nationwide lockdown made April and May the two worst months for the labour market.

The fall in month-on-month data is in sync with the falling trend captured in weekly data. Rural unemployment rate climbed down from a high 26.16% in the week ended 3 May to a low of 7.26% in the week ended 21 June.

Economists have said business loss and shrinking demand in the market may slow down the progress of new job creation hereon, and the fall in unemployment rate in June was due to unlocking process, agricultural activities and better allocation under the rural employment guarantee scheme.

India’s urban unemployment rate remained sticky, falling a meagre 0.6 percentage point in the week ended 28 June from the previous week, with industrial production yet to pick up pace in the face of a fresh round of lockdown in parts of the country. Economists said the pain may linger.

Earlier this week, CMIE's weekly data showed urban unemployment rate fell to 10.69% in the week to 28 June as against 11.29% recorded in the week to 21 June.

Rural unemployment and overall national joblessness rose marginally for the first time in six weeks. The rural unemployment rate climbed to 7.62% from 7.26% in the previous week, as per CMIE data for week ended 28 June.

Labour economists argue that rural employment scenario is much better than urban unemployment rate due to a robust sowing season and other options available in informal jobs space. In contrast, joblessness in formal sector job creation is driven by demand which will take time to revive, they added.

“The labour intensive manufacturing and heavy machine segments are not functioning with optimal resources, the demand in the market is low and the support supply chain is structurally weak. Besides, MSMEs are in a bad shape and formal sectors are shedding jobs for survival," according to K.R. Shyamsundar, a labour economist and professor at XLRI Jamshedpur.

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