India’s unemployment rate hits 6-month high of 9.06% in December

This is also the first time that rural unemployment rate was higher than urban in 2020.
Migrant workers
Migrant workers

India’s unemployment rate in December 2020 stands at 9.06%, data from the Centre for Monitoring Indian Economy (CMIE) has revealed, with the number of unemployed increasing by 11.3 million in the month. This is the highest in six months after June (10.18%), when the economy began recovering following a stringent lockdown and its financial impact.

“This huge increase places the number of unemployed higher than it was before the lockdown. The average count of the unemployed in 2019-20 was 33.3 million. The highest count in the year was 37.9 million in March 2020 and it was below 36 million before that,” Mahesh Vyas, CEO of CMIE said in a post on the December unemployment data.

This is also the first time in the entire year that the rural unemployment rate has been higher than urban. While the rural unemployment rate stood at 9.15%, urban was at 8.84%. According to Mahesh, the farming sector saw a loss of around 9.8 million jobs.

After the country saw high unemployment rates during April-June 2020, they began to marginally cool off, standing at 6.50% in November.

Mahesh said that a larger number of people were looking for work in December, with the labour force increasing from an estimated 421 million in November to 427 million in December.

“But labour markets were not ready for this six-million surge in labour. It thus left them largely unemployed,” he added.

The farming sector too, Mahesh said, was unable to absorb the influx of labour as December is usually the month when the sector sheds jobs.

“In each of the past five years since 2016, labour employed in farming in December has shrunk compared to November. In December 2019, the job loss from farming was 10 million. In December 2020, the sector shed an estimated 9.8 million jobs,” he added.

In terms of states, CMIE data shows that Haryana (32.5%) and Rajasthan (28.2%) had the highest unemployment rates in December 2020, while Odisha (0.2%) and Tamil Nadu (0.5%) saw the least. Among the other southern states, Karnataka saw a relatively low unemployment rate of 1.4%, while Kerala was at 6.5%, Andhra Pradesh at 6.7% and Telangana at 7%.

The situation doesn’t seem to be getting better either with the unemployment rate as of January 4, 2021 standing at 9.3% as per the CMIE website, where rural unemployment (9.6%) remains higher than urban (8.8%).

As more people are looking for work since December, Mahesh said that rising inflation makes the situation worse, thus impacting the economic recovery of the country.

“This does not look like a problem of one sector or one region. It seems to be secular decline. Employment has been falling month-after-month since September 2020 when it was estimated at 397.6 million. As a result, employment has not only remained consistently below year-ago levels, but it has also fallen far short of the two-years ago levels,” he wrote.

Related Stories

No stories found.
The News Minute
www.thenewsminute.com