City unemployment rate climbs to double digits
The urban unemployment rate hit double-digit rate for the first time in 17 weeks, at 10.09% for the weekend of December 12, pushing the country’s overall unemployment rate to a high of 8.53% over nine weeks, according to the Indian Economic Monitoring Center (CMIE). The rural unemployment rate was also at a nine-week high of 7.42% during the week.
“The high unemployment rate reflects an increase in demand for jobs and the inability of the economy to create sufficient jobs. It is, however, a welcome sign that as the unemployment rate has increased, the employment rate has also increased, ”Mahesh Vyas, managing director and CEO of CMIE, told FE.
The urban unemployment rate had remained high in recent weeks and was on the rise in November. Employment in towns and villages fell by 0.9 million in November, even though it increased by 2.3 million in rural areas from October’s level.
In a recent article, Vyas wrote: “Urban jobs arguably offer better wages and have a larger share of what are called organized sectors. Their decline implies a decline in the overall quality of jobs in India.
As official data last week showed industrial production stagnating in October, the finance ministry said over the weekend that gross domestic product, which rose 8.4% in the September quarter, would gain momentum. field in the remaining quarters of this fiscal year.
The strong recovery is evident from 19 of the 22 high-frequency indicators in September, October and November, as they crossed pre-Covid levels (the corresponding months of FY20), the Ministry of Economic Affairs in its November report. The CMIE’s employment data, which the ministry disputed, does not strictly agree with the rosy picture of the economy drawn by government leaders.
Rachit Mathur, founder and CEO of Avenue Growth, an on-demand job platform, said job losses in travel and hospitality seemed to be behind the soaring unemployment rate urban in recent times, followed by the education sector. The information technology industry, however, has experienced a huge boom.
Amid the rising rural unemployment rate, there has also been a decline in job creation under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MG-NREGS).
The MG-NREGS dashboard shows that person-days of work generated under the government’s flagship program have fallen from its peak of over 45 crore in June to 21-22 crore in October-November this year. In the first 13 days of the current month, it has fallen further to just 1.5 crore, according to provisional figures (which are often revised upwards). MG-NREGS offers a fallback option for the rural workforce, when jobs are not available elsewhere.