At 8.5 percent, unemployment rate falls to pre-lockdown levels, suggests CMIE data; rural employment likely to see 'bigger gains' in coming months

India’s unemployment rate reduced to pre-lockdown levels at 8.5 percent during the week that ended on 21 June, Centre for Monitoring Indian Economy (CMIE) said.

FP Staff June 24, 2020 17:17:39 IST
At 8.5 percent, unemployment rate falls to pre-lockdown levels, suggests CMIE data; rural employment likely to see 'bigger gains' in coming months

India’s unemployment rate reduced to pre-lockdown levels at 8.5 percent during the week that ended on 21 June, Centre for Monitoring Indian Economy (CMIE) said, even as India aims to restore economic activity in a phased manner amid the coronavirus -induced lockdown.

As coronavirus cases increased in India, the unemployment rate went from 8.75 percent to 23.5 percent in April and May, according to reports. The figure reached a high of 27.1 percent in the week ended 3 May, but saw a drastic improvement in the month of June, as India entered the Unlock 1.0 phase. “In the first three weeks of June, the unemployment rate dropped dramatically to first, 17.5 then 11.6 percent and now 8.5 percent,” CMIE managing director and CEO Mahesh Vyas said.

In urban India on the week ended 12 June, 11.2 percent unemployment rate was recorded, which was lower than the average of 25.83 percent during the peak unemployment period of April and May, according to another report. However, it was still higher than the average of 9 percent recorded in the period before the lockdown that was enforced from 24 March.

Rural employment has witnessed a big jump and is likely to see “bigger gains” in the coming months. “The unemployment rate dropped to 7.26 percent in rural India in the week ended 21 June. This is lower than it was in the pre-lockdown week ended 22 March when the rate was 8.3 percent. It is lower than the average unemployment rate in February and March 2020 which was 7.34 percent and 8.4 percent, respectively,” Vyas said.

Vyas attributed the increase in rural employment to the rise in Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA) activities, timely rains and enhanced sowing activities. He added that the average unemployment rate in rural India during the almost 13-week lockdown period was 20.3 percent, higher than the 13-week average of 6.8 percent recorded before the lockdown.

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