Unemployment rate falls to 10.99% in June from 23.48% in May: CMIE

Unemployment rate fell significantly to 10.99 per cent compared to 23.48 per cent in May, showing signs of improvement in the job scenario in the country and return to the pre-lockdown period, the Centre for Monitoring Indian Economy (CMIE) data suggests. The unemployment rate in urban areas for the month stood at 12.02 per cent, while it was recorded at 10.52 per cent in rural areas.

Haryana has the highest unemployment rate of 33.6 per cent, followed by Tripura at 21.3 per cent and Jharkhand at 21 per cent.

The number of employed people in the country in June stood at 37.3 crore, as per the CMIE data, while those looking for jobs are 46.1 crore. The country's employment rate in June was recorded at 35.9 per cent.

Notably, India's unemployment rate was recorded at the highest since January at 25.52 per cent after the government announced nation-wide lockdown with strict measures on March 25. The proceeding month also saw the unemployment rate of 23.48 per cent as most of the economic activity remained subdued. As per the CMIE data, around 12.2 crore jobs were lost in April.

The employment rate in March was recorded at 8.75 per cent, while it remained 7.22 per cent and 7.76 per cent in January and February.

"The unemployment rate has declined and simultaneously, the participation rate has recovered to close-to pre-lockdown period," CMIE Managing Director and CEO Mahesh Vyas said.

"As the lockdown stretched itself into several weeks and then months, its ensuing misery manifested itself in heart-breaking pictures of helpless migrant workers trudging back home; and in a pall of gloom setting in over economic prospects. Real GDP forecasts now average around five per cent shrinkage," Vyas added.

He said the reason behind the improvement in the unemployment rate across rural India can be explained by the rise in MGNREGA spending by the government, and increase in kharif sowing.

"There is no overlap between MGNREGA work and sowing work. The two together therefore have evidently powered the rural employment surge in June," he added.

This could have also absorbed a part of urban labour as well. The high demand for labour in rural India because of aggressive sowing and the rising wages in rural India are drawing urban labour into the rural India, he said.

READ: Unemployment rate falls to pre-lockdown level; MGNREGA helps in rural areas: CMIE