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Home / News / India /  Rural unemployment inches up, urban joblessness cooling slowly

NEW DELHI : With summer crop sowing season nearing an end, India’s rural unemployment rate has started moving upward. The rural unemployment rate climbed to 7.1% in the week ended 19 July from 6.34% recorded in the previous week, according to fresh data from the Centre of Monitoring Indian Economy (CMIE). Even though it is lower than the week before India went into a lockdown on 25 March, economists feel that the it will see a gradual climb in coming weeks and recovery of jobs in July won't be much.

While the overall national unemployment inched up to 7.94% in the week to 19 July from 7.44% the previous week, the urban unemployment rate dropped marginally to 9.78% from 9.92% during the same time period, CMIE data showed.

Economists and experts believe that the labour market will see a tougher challenge over the next couple of months both in the rural areas and urban pockets. In rural India sowing season is nearing an end, monsoon will pick up in parts of India and along with natural calamities like floods will restrict activities both in agriculture sector and partially limit low end self-employment avenues. In urban areas, which is even seeking patches of lockdown due to covid-19, the slow recovery of businesses, will limit a faster recovery that the country saw in June.

“The sowing season is nearing completion and strain in rural labour market will be visible in coming weeks. The National Rural Employment Guarantee Scheme (NREGS) is helpful but may not able to able to take pressure off and absorb all the people during the rainy season, who were earlier largely deployed in agriculture activities," said Arup Mitra, a professor of economics at Institute of Economic Growth in New Delhi.

Mitra said while CMIE data shows that rural employment scenario is much better in recent weeks, “we must take note that a higher labour force participation rate in agriculture means only a marginal growth in productivity of labour. Immediate income growth is not there," he said adding that here states and centre must devise a strategy for the growth of non-farm sector in rural India which can help absorb people in decent jobs. He said the slow recover of businesses and the urge to cut cost by employers for survival has a direct bearing

Agreed GN Jha, a farmer from Purnia in Bihar. “Farmers with a good land holding are doing fine but people who don’t have enough lands or working as daily wagers are facing real problem. The lack of cash in hand is a problem, and this is and this will prompt people to go back to urban areas again despite the bad living condition there. This is where non-farm activities and white collar jobs in regional level will be of help," Jha added.

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