BackRural unemployment at four-month low on good rains, NREGA
CMIE data showed urban unemployment continues to be sticky, though it fell 1.3 percentage points in the week to 12 July over the previous weekThe overall unemployment rate, too, came down to 7.44% in the week to 12 July from 8.87% in the previous week
PremiumAmid plentiful rains, increased sowing and the return of workers to cities, unemployment in India’s countryside fell to a four-month low in the week ended 12 July, while continuing curbs limited the improvement in towns and cities.
According to latest data from the Centre for Monitoring Indian Economy (CMIE), the rural joblessness rate slowed to 6.34% from the previous week’s 7.78%. The latest figure is lower than that for the week to 22 March, immediately before India went into a lockdown. In other words, this is the lowest rural unemployment rate after the week to 15 March, when rural joblessness was 6.07%.
The overall unemployment rate, too, came down to 7.44% in the week to 12 July from 8.87% in the previous week.
According to Union government data, area sown under kharif crops was 58 million hectares as of last week, 44% higher than a year ago.
“The cooling-off of rural unemployment is due to expanding farming activities, aggressive MGNREGA push, and the gradual return of migrants to their ex-employers," said K.R. Shyam Sundar, a labour economist and professor at XLRI Jamshedpur.
“But one must realize that this improvement in rural employment scenario is institutionalizing informality. The job loss in the formal sector, the layoffs that we are witnessing, is leading to self-employment and other odd works, including agricultural work," he said, adding unemployment in urban India will continue to be stubborn.
CMIE data showed urban unemployment continues to be sticky, though it fell 1.3 percentage points in the week to 12 July over the previous week. It said urban unemployment rate tapered to 9.92% in the week to 12 July over the week to 5 July, which is still much higher than pre-covid weeks.
“The cooling-off of urban joblessness slightly is an outcome of gradual but constant unlocking process, and increase in normal trading activities including at local markets, self-employment avenues, etc. Those who are coming back to previous employers due to demand in the workplace are only representing replacement jobs and not representing new jobs," Shyam Sundar added.
Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!
