India’s unemployment rate fell to its pre-lockdown levels of 8.5 per cent in the week ended June 21, said the Centre for Monitoring Indian Economy (CMIE), led up by big gains in the rural areas. The Mumbai-based think tank concluded that the rate previously had witnessed a surge from 8.75 per cent in March to 23.5 per cent in April and May.
According to India Today, it had touched the highest level at 27.1 per cent in the week ended May 3, following which there has been a miraculous 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 suggested that urban unemployment has “fallen sharply” but is still higher then pre-lockdown levels.
Vyas asserted 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.
However, he also further stated that the current urban unemployment rate is still higher than the average 9 per cent in the period before the lockdown.
Rural India leads recovery
CMIE data also showed that the big jump occurring 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 was also of the fact 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.concluded j