‘June employment lowest in 1 year’
THE EMPLOYMENT RATE FELL TO 35.8%, FROM 37.07% IN MAY. THE JOBLESS RATE ROSE TO 7.8% OF WORKFORCE, FROM 7.1% IN MAY
NEW DELHI: India’s labour market showed fresh signs of weakness in June, with the employment rate falling to its lowest in two years, as patchy monsoon rains may have delayed deployment of agricultural workers in rural areas, the head of a private research firm said.
Writing in the Business Standard newspaper on Tuesday, Mahesh Vyas, who is chief executive officer at the Centre for Monitoring Indian Economy Pvt., said the employment rate fell to 35.8% in June, from 37.07% in May. The jobless rate climbed to 7.8% of the total workforce in June, from 7.1% in May.
The rise in the jobless rate was entirely led by a rise in rural unemployment, data showed. The unemployment rate in rural India increased to 8.03% from 6.62% in May, while in urban areas, the jobless rate eased to 7.30% in June from 8.21% a month ago.
Overall, employment shrank by 13 million to 390 million in June, against a gain of 8 million jobs in April and May, Vyas said. While around 13 million jobs were lost during the month, the count of the unemployed increased by only 3 million as the rest exited the labor force, Vyas wrote.
This shrinkage brought down labour force participation rate to 38.8%, against 40% in the preceding two months. While this drop in employment and an equally sharp deterioration in other labour market ratios were alarming, the jobs picture was not completely dire across the country, Vyas wrote.
He said since monsoon rains were 32% below normal last month, it could have “slowed the deployment of labour into the fields.” Labour participation may improve as rainfall picks up in coming weeks, he added.
The agriculture sector shed nearly 8 million jobs in June, mostly connected to plantations, while crop cultivation added 4 million jobs, according to Vyas.
The data also pointed toward growing vulnerabilities for salaried workers with 2.5 million losing their jobs in June. The government shrunk the demand for armed forces while opportunities in private equity-funded new-world jobs have also started to shrink, Vyas wrote.