Unemployment rate worsens to 6.98% in October
NEW DELHI: Even as the rabi harvest season kicked off, India’s rural unemployment rate climbed more than 100 basis points (bps) in October month-on-month with the region seeing a significant fall in the creation of person-days under the national rural employment guarantee scheme.
According to the monthly data from the Centre for Monitoring Indian Economy (CMIE), rural unemployment climbed to 6.9% in October against 5.86% in September. Similarly, the national unemployment rate in October, too, was up 6.98% compared to 6.67% in the previous month. However, urban unemployment was down from 8.45% in September to 7.15% in October, as economic activity including industrial activity, picked up pace.
The weekly unemployment rate which was also published on Monday, showed that both rural and urban, and national unemployment rates, have climbed in the week ended 1 November compared to the previous week.
The CMIE data showed that while national joblessness climbed to 7.15% in the week ended 1 November as against 6.86% in the week ended 25 October, rural unemployment jumped to 7.17% during the same period. This was more than the October monthly joblessness rate, which was below 7%. Weekly urban unemployment touched 7.1% in the week ended 1 November, as against 6.79% in the previous week.
“The harvest season has started and it will absorb some in the labour market. But harvest season may not have picked up pace in several parts of the country, and surplus labour may be contributing to this trend. Second, lack of decent jobs and skills mismatch among available work and surplus workers in the current environment in rural markets must be impacting the labour participation rate,” said Arup Mitra, a professor of economics at the Institute of Economic Growth, New Delhi.
“Along with continued stress in tourism, hospitality and retail sectors, the low persondays creation by the rural employment guarantee scheme must have been behind the fall. After initial spurt in the rural job creation through MGNREGA, it seems to have subdued now,” said K.R. Shyam Sundar, another labour economist and professor at XLRI, Jamshedpur.
Reflecting economists’ point of view, government data showed that while MGNREGS created around 265 million person days of work in September, it was 173 million in October, declining by over 30% month-on-month.