India’s unemployment rate declines to 8.7% as Covid restriction ease

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India’s unemployment rate declined to 8.7 per cent in the week ended June 13 from the monthly unemployment rate of 14.7 per cent in May as COVID cases continue to decline. Data from the Center for Monitoring Indian Economy (CMIE) indicate that the improvement in the unemployment rate over the past weeks is due to the easing of restrictions in various parts of the country.

Urban unemployment rate decline to 9.7%

According to CMIE, the monthly unemployment rate in May was 14.7 per cent. The current urban employment rate has come down 8.18 percentage points from 17.88 per cent in the last week of May to 9.7 per cent in the week ended on June 13.

Rural unemployment rate decline to 8.4%

Rural India has also seen a decline in the unemployment rate. By the end of the second week of June, this rate has come down to 8.4 per cent as compared to 10.63 per cent in May.

Unemployment rate in 2019 & 2020

Earlier, India’s unemployment rate has increased sharply to 7.11 per cent in 2020, the year of the COVID-19 outbreak, from 5.27 per cent in 2019. And due to the second wave of the COVID-19, the unemployment rate reached 14.73 per cent in the week ended May 23, 2021. But the current declining trend in unemployment data is showing a considerable good future ahead in terms of employment.

Decline in unemployment rate

– 13 June 2021 – 8.70%
– 06 Jun 2021 – 13.62%
– 30 May 2021 – 12.15%
– 23 May 2021 – 14.73%
– 16 May 2021 – 14.45%

Experts Take

Experts and economists say that the sharp decline in the weekly unemployment rate is due to the recovery made by the unorganized sector. The formal sector is believed to continue to struggle a bit as its revival depends on demand in the economy and a return to maximum capacity production in factories.

In the midst of recovery, the onset of monsoon can be a momentum for the economy. But with the threat of another Covid wave in the near future, uncertainty surrounds Indian economic growth. Meanwhile, Moody’s Investors Service in its latest projection for India said the country’s real GDP will grow at 9.6 per cent in 2021.

This coincides with an improvement in mobility data as several Indian states lifted local lockdowns imposed to contain the spread of the virus. Google’s Community Mobility Report data on public transport and workplaces show that activity levels have begun to improve in recent weeks, while electricity consumption, a widely used measure of demand in India’s industrial and manufacturing sectors, is returning.