Unemployment rate drops in India post lockdown

CMIE survey shows encouraging figures

Wednesday, 24th June 2020

The lockdown had made the economy unstable and had paved the way for a rapid rise in the country’s unemployment rate. But after the reopening of the economy things are changing. As per the reports of Centre for Monitoring Indian Economy (CMIE) in the week ending at June 21 the rate of unemployment dropped to 8.5%; i.e. the pre-lockdown rate. There were significant gains in the country’s rural belts.

 The survey conducted by CMIE predicts that in the coming months the gains could soar further. The encouraging figures collected from the survey come as a big relief for the Indian government as the government had been fighting against stark unemployment issues and rampant job losses triggered by the COVID-19 pandemic. In the month of April-May (2020) the unemployment rate in the country had jumped to 23.5% from 8.75% (in March 2020).

With the pacing up of economic activities in the country post lockdown there has been a dramatic fall in the rate of unemployment in the country. Within just the first 3 weeks of the month of June 2020, the rate of unemployment fell to 17.5% first, then to 11.6% and again now to 8.5% (as per the data from CMIE Survey). The survey further showed that post lockdown the rate of joblessness in urban India fell to 11.2% and in rural India fell to 7.3% respectively. The rural drop rate is significant as the rate now is even lower than what it used to be in the pre-lockdown months (it was 8.3% in the week ending at March 22nd).

The brighter side of the story is that in rural India, the opportunities for employment has increased which is why the rate of unemployment has dropped. The gains, as believed by the experts, have come mainly through the Rural Job Guarantee Program.

Mahesh Vyas (CEO & MD of CMIE) said in this context: “The big gain in employment is happening in rural India. And, it may see bigger gains in the months to come or at least sustain the current gains,”

He further said: “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 activities and also by a sharp increase in kharif sowing this year,”

He added that the number of jobs created on person-days basis in the month of May 2020 jumped to 565 million. The figures are significantly higher than what they used to be in the recent past. Last year during the month of May, the figures stood at just 370 millions. The survey data further informed that as many as 33 million Indian households have gained from this scheme. Again, this number is about 55% higher when compared to the figures of last year.

Source: Times of India