Unemployment rate rises to 7.8% in June

The country’s overall joblessness rate was 7.8% in June and 7.12% in May. It was 7.83% in April.

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The urban unemployment was lower at 7.27 in March 2021 than 7.3% recorded in June this year.

The country’s joblessness rate rose to 7.8% in June from 7.12% in the previous month, as the rural unemployment level spiked 141 basis points (bps) to 8.03%, showed the data compiled by the Centre for Monitoring Indian Economy (CMIE).

CMIE’s MD and CEO Mahesh Vyas said the spurt in rural joblessness is “transitory”. “The overall unemployment rate is range-bound — in the range of 7% to 8%. In June, the rural unemployment rate increased but the urban unemployment rate did not. This is likely a transitory increase in rural unemployment. As sowing gathers momentum this rate is expected to decline,” Vyas said.

However, K R Shyam Sundar, a labour economist, said the CMIE data, along with a surge in demand for jobs under Mahatma Gandhi National Rural Employment Guarantee Scheme (MG-NREGS), points to a distressed rural job market. “This (CMIE data) along with higher demand for MGNREGA work reinforces the fact rural labour market is in distress. Non-farm employment like construction generation aspects need to be considered to help employment recovery,” Sundar said.

The decline in the urban unemployment rate is primarily because of the steady rise in demand for workers from retail, e-commerce, healthcare and IT sectors, said Rachit Mathur, founder & CEO of Avenue Growth, an on-demand work platform.

Urban unemployment was lower at 7.27% in March 2021, against 7.3% recorded in June this year. The country’s overall joblessness rate was 7.8% in June and 7.12% in May. It was 7.83% in April.

The rural unemployment rate was 7.24% in March, 7.18% in April and 6.62% in May. As reported by FE on July 2, according to the MGNREGS dashboard, maintained by the rural development ministry, nearly 31.7 million households and 43.2 million persons were looking for work in June this year, higher from 25.4 million and 35.3 million respectively, over the same month in 2019-20, the year before the pandemic hit the country.

During the same month (June) in FY21 and FY22, there was a higher demand for work from both households and individuals compared with June FY23, but those were the years which saw huge reverse migration that led to the spike in demand for jobs under the rural job guarantee scheme.

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