It peaked at 23.52% in April last year amidst a country-wide lockdown but started falling from then onwards. In May last year, the country’s unemployment rate was 21.73%.
The unemployment rate decreased further to 8.72% for the week ending June 27 from 9.35% in the previous week but remained higher than 8.16% recorded at the beginning of the second Covid-19 wave in early April.
Centre for Monitoring Indian Economic’s (CMIE) MD & CEO Mahesh Vyas noted that the labor participation rate (LPR) has fallen to 39.6% from 40.5% a week earlier.
“The unemployment rate has fallen on a fallen LPR. The LPR fell from 40.5% in the previous week to 39.6%. As a result, despite the fall in the unemployment rate, the employment rate has fallen from 36.7% in the previous week to 36.2% in the week ending June 27. This is not a good development,” Vyas told FE.
LPR is an age-specific proportion between persons working or actively seeking work and the total population in the working-age group, usually 15 years and above. The unemployment rate is the ratio between persons not currently in a job but actively searching for one and the total labor force.
For the week endingg June 27, however, rural and urban areas have contributed to the decline in the overall unemployment rate. While the rate fell to 8.98% in urban areas from 10.3% a week ago, the unemployment rate declined to 8.6% in rural areas from 8.92% on June 20.
On April 4, the urban unemployment rate was 7.21%, and the rural unemployment rate was 8.58%, according to CMIE. The overall unemployment rate reached as high as 14.73% on May 23. In recent times, the highest unemployment rate in rural areas was at 14.34% for the week ended May 16. The recent highest was recorded in urban areas on May 30 at 17.88%.
The second Covid wave has led to a sudden spike in India’s unemployment rate – it rose to 11.9% in May (for the whole month) from 7.97% in the previous month. The momentum had last reached double digits in June last year when it was 10.18%.
According to the CMIE data, barring April, May, and June last year, the monthly unemployment had never breached the double-digit mark since January 2016.
It peaked at 23.52% in April last year amidst a country-wide lockdown but started falling from then onwards. In May last year, the country’s unemployment rate was 21.73%.
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