Home >News >India >Rural unemployment rate sees a marginal spike in peak season

NEW DELHI : India’s urban unemployment rate remained sticky, falling by 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 will linger.

The urban unemployment rate was 10.69% in the week to 28 June, marginally lower than the 11.29% recorded in the week to 21 June, according to data released by the Centre for Monitoring Indian Economy. Urban unemployment at 10.69% is still much higher than in pre-lockdown weeks.

Rural unemployment and overall national unemployment climbed up marginally for the first time in six weeks. The rural unemployment rate climbed to 7.62% from 7.26% in the previous week.

Economists ascribed high joblessness to the fact that industrial belts are not running to capacity, and to renewed lockdowns in Maharashtra, Tamil Nadu, Assam and West Bengal.

“Formal sector job creation is driven by demand creation. 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," said K.R. Shyamsundar, a labour economist and professor at XLRI Jamshedpur.

“We know what’s happening in Maharashtra from both covid point of view and fresh lockdown rules in parts. Industrial belts in and around Chennai and nearby districts are down due to rising coronavirus cases, and there are states like Assam and West Bengal who have talked about extension of lockdown. All this will have an impact on urban unemployment which is likely to hover between 10-15% for the next few months," Shyamsundar said.

On Sunday, Maharashtra chief minister Uddhav Thackeray said he does not think the “lockdown restrictions will cease after 30 June. The threat of covid-19 still looms over the state and all precautions need to be taken".

Assam has announced a 14-day complete lockdown in Kamrup (Metro) district, including Guwahati city. In Tamil Nadu, Chennai, Thiruvallur, Kancheepuram, Chengalpet and Madurai are under lockdown after cases surged.

By contrast, the situation is better in rural India with unemployment staying below 8%. But in the week to 28 June, joblessness rose for the first time in six weeks.

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