Unemployment rate in Dec at six-month high

NEW DELHI: The unemployment rate as well as rural joblessness jumped to a six-month high in December, indicating the economy is not yet ready to absorb a sizeable pool of the labour market despite almost all the sectors opening up.

According to the Centre for Monitoring Indian Economy, the national unemployment rate climbed to 9.06% in December from 6.51% in November, while the rural rate climbed to 9.15% as against 6.26% in November.

Both national and rural joblessness are also at the highest since July. In June, when the country was still facing peak pandemic, and several sectors were under lockdown, monthly unemployment was 10.18% at the national level, and 9.49% in rural India. In July, figures were 7.4% and 6.51%.

Interestingly, the urban unemployment rate (8.84%), which has hovered higher than the rural and national average for the last several months, has reported a lower number than both in December. Though this is still higher than the November figure and is the highest in four months, it still gives hope that urban India may be shaping up better than other regions.

Economists and experts said the latest figures indicate that the economy is still sluggish and is not yet ready to accommodate enough hands in the labour market—despite an EPF subsidy scheme being in place for the past two months. They argued that the constant pressure on jobs may push the Centre to spend more on rural employment scheme, infra and allied sectors in the annual budget next month, to spur job creation.

According to government data, while Mgnregs created some 236 million person-days of work in November, it was 188.07 million in December, a fall of 48 million person-days month-on month. To be sure, the official data showed that December person-days creation was slightly higher than what was estimated before the concerned month.

“The government will have to spend more on reviving demand. It needs to spend more on infrastructure creation, on Mahatma Gandhi National Rural Employment Guarantee scheme among others job creation avenue,” said Arup Mitra, a professor of economics at Institute of Economic Growth, New Delhi, adding that in urban India labour intensive construction and retail segments are gradually improving.