Unemployment rate falls to pre-lockdown level: CMIE

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The unemployment rate in India fell to its pre-lockdown level of 8.5% in the week ended June 21 from the peak rate of 23.5% in April and May after the nationwide lockdown was imposed resulting in job losses for millions of workers.

However, the urban unemployment continues to be higher than pre-Covid levels while the rural unemployment has come down significantly, thanks to Mgnrega and Kharif sowing across the country, said the Centre for Monitoring Indian Economy in its weekly report on Tuesday.

The unemployment rate stood at 8.75% in March and had peaked to as high as 27.1% in the week ended May 3 after which it began to fall. In the first three weeks of June the unemployment rate dropped 17.5%, 11.6% and now stood at 8.5%.

According to CMIE, though urban unemployment has fallen sharply it is still distinctly higher than the pre-lockdown levels at 11.2% in the latest week ended June 21. “This is still over 200 basis points higher than the 9%average in the period before the lockdown,” it said. The average unemployment rate stood at 9% in the 13 weeks period preceding the lockdown.

The unemployment rate dropped to 7.26% in rural India in the week ended June 21, lower than it was in the pre-lockdown week ended March 22 when it stood at 8.3%. However, it is still a little higher than the 13-week average pre-lockdown rate of 6.8%.

“While relaxation of the lockdown has helped in alleviating the unemployment stress in general, rural India has apparently gained by the massive sudden increase in Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA) activities and also by a sharp increase in kharif sowing this year,” it said.

According to CMIE, the person-days of jobs created in May 2020 under the rural unemployment scheme shot up to 565 million, 53% higher than the 370 million person-days of jobs created under the scheme in May 2019 and 2.55 times the average monthly person-days of jobs created in 2019-20. “33 million households benefited from the scheme in May 2020, a 55% increase than the number of households that benefited a year ago,” it added.

CMIE further said that the overlap of Garib Kalyan Rojgar Yojana with MGNREGA is unclear. “Nevertheless, rural unemployment can be expected to remain low till October 2020 at least,” it said, adding these efforts can also be expected to raise consumption demand from rural India.

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Tagged cmie, MGNREGA, nationwide lockdown, Rojgar Yojana, the centre for monitoring indian economy, unemployment rate

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