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Unemployment continues to grow in May 2019 as jobs stagnate, says CMIE

Although unemployment rate has stabilised around 7 per cent in the first five months of 2019, it has shown a growing trend during this period.

twitter-logo BusinessToday.In   New Delhi     Last Updated: June 3, 2019  | 22:27 IST
Unemployment continues to grow in May 2019 as jobs stagnate, says CMIE
Jobs scenario in urban India seems to paying the price for dwindling private investment in the country.

The unemployment rate for May 2019 was recorded at 7.17 per cent, the Centre for Monitoring Indian Economy said in a report. While this was marginally better than year-ago levels, unemployment rates are not expected to come down, the report added. The numbers with the Mumbai-based think tank showed that unemployment rate has nearly doubled over the past two years in May 2019.

"The unemployment rate in May 2019 was 7.17 per cent. This is slightly lower than the 7.35 per cent unemployment rate recorded in April 2019. But, this fall does not indicate an easing of the unemployment rate. Unemployment rate has remained elevated in 2019 compared to its levels in 2018 when it averaged at about 6 per cent," CMIE stated in its report.

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Although unemployment rate has stabilised around 7 per cent in the first five months of 2019, it has shown a growing trend during this period. Unemployment rates have been soaring on the back of stagnating employment coupled with steady and huge influx of new jobseekers entering the labour market, CMIE stated in its report.

This description fits the job scenario in urban India, where the rise in number of jobs failed to meet the demand for employment. It was estimated that 11.8 million were unemployed in the urban regions of India by May 2019. This was almost 41 per cent higher than 8.4 million unemployed during the year-ago period, in May 2018.

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"May 2019 saw an extraordinary increase in the count of urban unemployed. It shot up from 10.4 million in April to 11.8 million in May 2019. It is possible that part of this increase was the result of the ongoing national elections. As during elections, the demand for people to organise campaigns will have gone up. Many of those who entered the labour market in response to this increase in demand did find jobs but, others did not. Those who try but do not find jobs show up in the count of the unemployed," CMIE clarified in its report.

But situation had been bleak in Indian cities even before the election season. The unemployment rate in May 2019 was 8.53 per cent, compared to 8.58 per cent in January 2019. The average urban unemployment rate during the first five months of 2019 was 8 per cent, as compared to 6.1 per cent in the corresponding months of 2018.

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The job scenario in urban India seems to be feeling the effects of dwindling private investment which created sufficient jobs in the formal sector, the CMIE report said.

Contrastingly, rural India once again showed a rise in employment rates, a trend which continued since December 2018. Rural employment in May 2019 was estimated at nearly 276 million, which was 1.3 per cent higher than it was in April 2019 and 0.38 per cent higher than it was a year ago, the CMIE report said. The number of unemployed people seeking jobs continued to decline in May 2019 to an estimated 19.3 million, less than the average of 19.9 million during the past three months.

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"A combination of rabi crop harvesting and elections could have contributed to the increase in rural employment in May 2019," the report further added.

However, when looking at the bigger picture, jobseekers have struggled in rural regions too. The rural unemployed in May 2019 were nearly 44 per cent higher than their count in May 2018, the report added.

A delayed monsoon could make this year even more challenging for the labour force in rural India, CMIE further said.

(Edited by Vivek Punj)

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