Unemployment Rate In Aug Worsens As Rural Job Opportunities Decline

The unemployment rate in India for the month of August rose to 8.4 percent from 7.4 percent in July, according to data from CMIE's survey.

The jump in unemployment numbers is largely due to loss of casual work avenues under the Mahatma Gandhi National Rural Employment Guarantee scheme and end of the sowing season.

The Centre for Monitoring Indian Economy said that though the labour force increased from 424 million in July to 428 million in August, the increase added to the count of unemployed which rose from 32 million to 36 million.

Analysis by CMIE shows that recovery in the unemployment rate halted in August with overall employment rate in the country falling marginally to 37.5 percent when compared to 37.6 percent in July.

Employment in August 2020 was 10.7 million lower than it was in August 2019 and continued to remain lower than in any month in the pre-lockdown period since at least January 2016 when CMIE started measuring labour statistics directly.

"On a net basis, none of the increase in the labour force could translate into an increase in employment. It just showed an increase in the count of the unemployed," CMIE said, adding that the deterioration in labour market conditions was essentially seen in rural India.

In June, when unemployment rate recovered sharply to 11.63 percent from a record high of 23.52 percent seen in April, economists had warned that the improvement was temporary as it was largely due to self-employment and casual work avenues created by the crop planting season for those how had returned to their villages amid the coronavirus induced lockdown.