Unemployment Rate In India Begins To Improve In June

India's unemployment rate fell sharply in the second week of June, as many jobs lost during the nationwide lockdown were restored, offering some hope.

According to the Centre for Monitoring Indian Economy's (CMIE) data, the national unemployment rate declined to 11.63 percent in the week ended 14 June from 17.51 percent in the previous week.

From 1 June, central and state governments permitted offices, factories and other commercial establishments to resume work with necessary sanitary measures, except in containment zones.

While the unemployment rate may have significantly improved, it is still not reached the pre-lockdown levels. In the week ended 22 March, the rate of unemployment stood at 8.41 percent but had worsened to a record high of 23.52 percent for the whole month of April and corrected only a little at 23.48 percent in May.

Economists cautious of data

CMIE's survey data showed the unemployment rate in urban areas for the 14 June week was at 13.1 percent, which is higher than the overall unemployment recorded and also higher than the rural unemployment rate of 10.96 percent.

Looking at this data, economists suggest that the improvement is largely due to self-employment and casual work avenues and should not be interpreted as growth in the formal sector. It is likely that the ongoing crop planting season in most of India may have created employment opportunities in the villages for those who returned to their hometowns from the cities.

Those employed as drivers, housekeeping and support staff in offices were forced to move to their home town due to job loss or wage loss, changing from formal to informal jobs.