Home >News >India >Rural unemployment rate rises for second week, urban job loss remains high
Economists and experts said unlike June, July will not see a good recovery in replacement jobs and fresh job creation will take time.
Economists and experts said unlike June, July will not see a good recovery in replacement jobs and fresh job creation will take time.

Rural unemployment rate rises for second week, urban job loss remains high

  • The national unemployment rate inched up to 8.21% in the week ended 26 July as against 7.94% in the week to 19 July and 7.44% in the week to 12 July
  • Urban unemployment rate dropped marginally to 9.78% from 9.92% during the same time period

NEW DELHI: India's rural unemployment rate rose for the second consecutive week as agricultural activity slowed down, reducing the sector's capacity to absorb labour, and as parts of India observed fresh lockdowns.

The rural unemployment rate climbed to 7.66% in week ended 26 July as against 7.1% reported in the week to 19 July, according to data from the Center of Monitoring Indian Economy (CMIE). Though this is still lower than the immediate week preceding the lockdown, it is much higher than the week ended 15 March (6.07%) when India was in a fairly better position and the covid-19 pandemic had not spread as much.

The national unemployment rate too inched up to 8.21% in the week ended 26 July as against 7.94% in the week to 19 July and 7.44% in the week to 12 July.

The urban unemployment rate dropped marginally to 9.78% from 9.92% during the same time period, CMIE data showed. In a way, this is also the highest job loss rate in three weeks.

Economists and experts said unlike June, July will not see a good recovery in replacement jobs and fresh job creation will take time. They said, besides the summer crop sowing season drawing to a close, the spike in coronavirus cases in rural India has impacted the employment scenario.

“The sowing season that started largely in June is coming to an end by end of July. This means people who were in agricultural activities during the sowing season are largely not there. A labour rural economy and less work in farming fields means more people are jobless and at home. This is a huge challenge and this may push people to come to cities again," said Arup Mitra, a professor of economics at institute of Economic Growth in New Delhi.

Mitra said along with the reduced demand in the field, rural India is observing a high growth in covid-19 infections. “Look at West Bengal, Assam, Bihar, parts of Odisha, Telangana, Andhra Pradesh and many other states…you get two trends growth in coronavirus infections and lockdown in parts. This has a direct bearing on self-employment avenues in rural India. I see this to be trend at least in the near future and influence the employment environment there," he said, adding the rural job absorption in recent months “were not decent jobs but distressed employment in informal sector".

Experts said urban India will see a marginal recovery as cities like Delhi and Mumbai are showing positive progress to some extent but it will take time for formal jobs to return. “First the replacement jobs will come, then self-employment avenues and then fresh job creation once the demand in the market picks up. It’s a medium to long term process," added K.R. Shyamsundar, labour economist and professor at XLRI, Jamshedpur.

True to economists view, CMIE data for urban unemployment showed that it has marginally dropped to 9.43% in the week to 26 July as against 9.78% in the previous week. Despite the fall, it is still higher than both rural and overall unemployment rate.

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