India's Unemployment Rate Touches 9-Week High

After July's recovery, where the overall unemployment rate in India had lowered to pre-COVID-19 levels, the percentage of those without a job has risen. Data from the Centre for Monitoring Indian Economy (CMIE) showed that the unemployment rate in the country for the week ended 16 August was at 9.10 percent wherein urban employment stood at 9.61 percent and that of rural India was 8.86 percent.

This is the highest rate since 11.63 percent (13.10 percent urban, 10.96 percent rural) seen for the 14 June ending week. In comparison, the unemployment rates for the previous two weeks were reported at 8.67 percent (9 August) and 7.19 percent (2 August).

In July, the unemployment rate had managed to recover significantly to pre-COVID levels, that is to 7.43 percent from 10.99 percent in June. The rural unemployment rate in July had shown a better recovery by falling to 6.6 percent against 10.52 percent in June, which economists said due to good monsoon and better sowing season in rural India along with the gradual resumption of the economic activities in urban centers during the month. Since the recovery was due to a rise in agricultural activities, it was expected to be temporary.

The CMIE Unemployment Survey has become the proxy for evaluating the state of the labour market in the country since its inception. The labour force consists of employed persons and persons who are unemployed but actively looking for jobs. The survey includes a sample size of 43,600 households per month disturbed well across urban and rural areas.

During the month of lockdown, that is April 2020, an unemployment rate was recorded at 23.52 percent, which was also the highest ever since the Mumbai-based think tank began its survey in 2016.