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The Unemployment Rate Zooms To 1 Year High Of 8.3%

India’s unemployment rate surged to a one-year high of 8.3 per cent in August as employment sequentially fell by 2 million to 394.6 million, according to data from the Centre for Monitoring Indian Economy (CMIE). During July, the unemployment rate was at 6.8 per cent and the employment was 397 million, the CMIE data added.

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The Urban-Rural Contradiction:

“The urban unemployment rate is usually higher at about 8 per cent than the rural unemployment rate, which is usually around 7 per cent. In August the urban unemployment rate shot up to 9.6 per cent and rural unemployment rate also increased to 7.7 per cent,” CMIE managing director Mahesh Vyas told. Vyas further stated that erratic rainfall affected sowing activities and this is one of the reasons for the increase in unemployment in rural India.

Rural Scenario:

The unemployment rate in rural India rose from 6.1 per cent in July to 7.7 per cent in August. More importantly, the employment rate fell from 37.6 per cent to 37.3 per cent. “Going forward, the rural unemployment rate may come down as delayed monsoon will increase agricultural activities towards the end of the monsoon season. However, it is not clear how the urban unemployment rate will play out in the coming months. Currently, it is quite elevated,” Vyas added.

State-wise Comparison:

During August, the unemployment was the highest in Haryana at 37.3 per cent followed by Jammu and Kashmir at 32.8 per cent, Rajasthan at 31.4 per cent, Jharkhand at 17.3 per cent and Tripura at 16.3 per cent, according to the data. While the unemployment was the lowest in Chhattisgarh at 0.4 per cent followed by Meghalaya at 2 per cent, Maharashtra at 2.2 per cent and Gujarat and Odisha at 2.6 per cent each, the data showed.

Female labour participation:

Women’s presence in the workforce remains worryingly low in India, with a few instances of uptick negated time and again, a recent report by a private think tank shows. The situation is even direr for women in younger age groups, the survey notes. While female labour force participation rate (LPR) did show signs of recovery from its pandemic lows, the number of women entering the workforce has stalled or declined across most age groups during the first four months of 2022, shows a survey by the Centre for Monitoring Indian Economy (CMIE). The female LPR in the age bracket of 20-24 was 10.91 per cent in 2018. In 2020, this went up to 12.91 per cent. Young women had started to come back to the labour markets in greater numbers during 2018-2019. In comparison, male LPR has seen marked recovery in major age groups during January-March 2022, compared with January-March 2020, before declining in the retirement age groups of 60-64 years and above 65 years. While labour force participation — the proportion of the population that seeks employment — rises rapidly with age, this age distribution of the LPR is very different for men and women.

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