The country’s unemployment rate touched a 16-month high of 8.3% in December, the Centre for Monitoring Indian Economy (CMIE) said, but added that the increase was partly attributable to a rise in the labour participation rate.
Previously, the joblessness rate had touched a high of 8.32% in August 2021. The rate has been slowly rising in recent months, with the August 2022 figure coming in at 8.28%. The all-India unemployment rate was 8% in November, but had risen to over 9% for a few days in December.
However, Mahesh Vyas, managing director, CMIE, said the increase in the unemployment rate is not a matter of concern. “It has risen because the labour force participation rate has increased,” he told FE.
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According to CMIE data, the urban unemployment rate rose to 10.09% in December 2022, while rural unemployment was marginally lower at 7.44% in the month.
Among states, Haryana had the highest unemployment rate in December at 37.4%, followed by 28.5% in Rajasthan and 20.8% in Delhi, the data showed. Job creation is seen to be a crucial issue in the upcoming state elections this year as well as the general elections in 2024. It has also been a key priority for the government.
However, recent data has shown an uneven picture on job creation. Unemployment rate declined to 7.2% in July-September 2022 from 9.8% in the same period a year ago, according to the Periodic Labour Force Survey.
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Payroll data of the Employees’ Provident Fund Organisation (EPFO) had indicated a slowdown in formal sector job creation in October. About 0.73 million new members were added to the social security schemes run by the EPFO in October, down from 0.98 million in September. New member additions have been on the decline after hitting a high of 1.15 million in July 2022.