In what seems to be good news for the Indian economy, the country’s unemployment rate has eased to pre-lockdown levels and further recovery is expected in the coming months, said CMIE.
New Delhi, June 24:
India’s unemployment rate has eased to pre-lockdown levels of 8.5 per cent in the week ended June 21, said the Centre for Monitoring Indian Economy (CMIE). The Mumbai-based think tank said the rate had earlier spiked from 8.75 per cent in March to 23.5 per cent in April and May.
It had peaked at 27.1 per cent in the week ended May 3, following which there has been a drastic improvement in June. CMIE managing director and CEO Mahesh Vyas said, “In the first three weeks of June the unemployment rate dropped dramatically to first, 17.5 then 11.6 per cent and now 8.5 per cent.”
He went on to suggest that urban unemployment has “fallen sharply” but is still higher then pre-lockdown levels.
Vyas said the figure of 8.5 per cent is still over 200 basis points higher than nine per cent average in the period before the lockdown. He noted that the 11.2 per cent unemployment rate in urban India in the week ended June 12 was lower than the average of 25.83 per cent during the peak unemployment period of April and May.
Rural India leads recovery
CMIE data also suggested that the big jump in rural employment is leading India’s economic recovery. It adds that rural employment may see “bigger gains” in the months to come.
“The unemployment rate dropped to 7.26 per cent in rural India in the week ended June 21. This is lower than it was in the pre-lockdown week ended March 22 when the rate was 8.3 per cent. It is lower than the average unemployment rate in February and March 2020 which was 7.34 per cent and 8.4 per cent, respectively,” CMIE’s Vyas said.
“It is much lower than the average 13-week lockdown period average of 20.3 per cent and, it is still a little higher than the 13-week average pre-lockdown rate of 6.8 per cent,” he added.
The economic think tank explained that the sudden increase in Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA) activities have led to a sharp increase in rural employment besides easing of restrictions.
“Aggressive use of the MGNREGA scheme by the government, timely rains and enhanced sowing activities seem to have helped engage rural India and bring the unemployment rate down,” Vyas said.