India's labour market appears distressed with an estimated unemployment rate that increased to a 27-month high of 7.38 percent in December 2018 after the total number of people employed in India fell by 1.09 crore as per data from CMIE.
The Centre of Monitoring Indian Economy (CMIE) data showed that the total number of people employed in India in December 2017 was 40.78 crore which came down to 39.69 crore in December 2018. 83 percent of the 1.09 crore jobs lost were in rural India.
In terms of rate of unemployment, it rose from 6.62 percent in November 2018 to 7.38 percent in December 2018, which is the highest since September 2016 where it was stood at 8.46 percent. The "Unemployment Rate in India" database maintained by CMIE is based on a panel size of 1,58,000 households.
The rural parts of the country, where the maximum number of jobs were lost last year (83 percent), saw the number of people employed drop by 91.4 lakh from 26.94 crore to 26.03 crore in December 2018. In the urban areas, the number of employed persons fell from 13.84 crore to 13.66 crore in a year.
The data further pointed out that besides a rise in unemployment there has been a decline in the Labour Participation Rate (LPR). It fell from 43.57 in December 2017 to 42.47 in December 2018. In December 2016, LPR was at 47.84.