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Photo: Indranil Bhoumik/Mint
Photo: Indranil Bhoumik/Mint

India's July unemployment rate down at 7.43%

  • The overall unemployment rate in July came down to 7.43% from 10.99% in June
  • Between, August 2019 and February 2020, the overall joblessness hovered between 8.19% and 7.16%

NEW DELHI : India's overall unemployment rate in July dropped to pre covid-19 levels indicating that the job crisis during past three months, when the country was under strict lockdown, has declined notably.

Fresh data from Centre of Monitoring Indian Economy (CMIE) showed that the overall unemployment rate in July came down to 7.43% from 10.99% in June. This was lower than March when the overall unemployment rate of the country was 8.75%.

Between, August 2019 and February 2020, the overall joblessness hovered between 8.19% and 7.16%, CMIE data showed.

As per the data, the unemployment rate of Odisha and Gujarat stood at 1.9% each, lowest among the states, followed by Meghalaya at 2.1%. Haryana on the other hand had highest unemployment rate at 24.5%, followed by Delhi at 20.3% and Himachal Pradesh at 18.7%.

The monthly rural unemployment rate in India also dropped to 6.6% in July as against 10.52% in June, a trend, which was largely visible in the weekly data.

However, the urban unemployment rate, remained higher than both national and rural joblessness rate. The urban unemployment rate in July was recorded 9.15% as against 12.02% in June. As per CMIE, urban joblessness had touched a high of 25.79% in May and 24.95% in April, making them two of the worst months for jobs creation.

The fall in unemployment rate is largely attributed to a good monsoon and better sowing season in rural India as well as gradual resumption of the economic activities including opening of self-employment avenues in both rural and urban centers during the month.

“The improvement in 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 income growth of workers because more people doing a job which was earlier done by lesser number of them. Then the stress in small scale industries and the partial operation of factories due to low demand especially in urban India," said Arup Mitra, a professor of economics at Institute of Economic Growth in New Delhi.

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

A recent survey by human resource firm Manpower Group, showed that during the third quarter of the calendar year 2020 (July-Sept) showed continuing stress in the formal sector job creation. Indian employers has reported a cautious hiring plans with with 5% of employers anticipating an increase in payrolls, 2% expecting a decrease and 47% forecasting no change. “Hiring prospects weaken in all four regions when compared with the previous quarter, including decreases of 9 percentage points in two regions – the North and the East. In the West, employers report a decline of 8 percentage points, while the Outlook for the South is 6 percentage points weaker," the Manpwer survey released in July has said.

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