Rural unemployment declines to four-month low as per CMIE data

Representative Image (REUTERS/Jayanta Dey)

Unemployment in rural India has fallen to a four-month low of 6.34 percent, as economic activity resumes in a phased manner.

Rural unemployment rate was 6.34 percent during the week that ended on July 12, the lowest since the 6.07 percent rate recorded during the week that ended on March 15, according to data from the Centre of Monitoring Indian Economy (CMIE).

CMIE data also indicates that area sown under kharif crops was 58 million hectares as of July 10, 44.1 percent higher than the level recorded during the same period last year.

"The cooling-off of rural unemployment is due to expanding farming activities, aggressive MGNREGA push, and the gradual return of migrants to their ex-employers," said KR Shyam Sundar, a labour economist and professor at XLRI Jamshedpur said as per a report by Mint.

"But one must realise that this improvement in rural employment scenario is institutionalising informality. The job loss in the formal sector, the layoffs that we are witnessing, is leading to self-employment and other odd works, including agricultural work," Sundar added.

He is of the view that unemployment in urban India will continue to "remain stubborn".

Unemployment levels had seen a sharp increase across the country after the lockdown was imposed on March 24, since most economic activity was halted. The unemployment rate is now moving closer to pre-lockdown levels after gradual resumption of economic activity.

In April and May, the rural unemployment rate was slightly higher than 22 percent, while overall unemployment was above 23 percent, according to CMIE data.

Overall unemployment in June recovered, declining to 10.99 percent, while rural unemployment was 10.52 percent and the number for urban areas was 12.02 percent.

During the week ended July 12, unemployment rate across India was 7.44 percent, while in urban areas it was 9.92 percent.