Unemployment rate in India rises to 7.8% in June; rural unemployment rate climbs to 8.03%

New Delhi: The month of June witnessed a rise in the unemployment rate in India to 7.8 per cent of the total workforce from 7.12 per cent in May. The increase in unemployment rate was mainly due to a rise in rural unemployment, as per data from the Centre for Monitoring Indian Economy (CMIE).

However, India’s June employment is at the lowest in the last one year, according to the CMIE estimates. Rural unemployment rate rose on the back of uneven monsoon rains which have led to a delay in the deployment of agricultural labour in rural areas.

The unemployment rate in the rural areas climbed to 8.03 per cent from 6.62 per cent in May. The urban unemployment rate, on the other hand, reduced to 7.30 per cent during the same period from 8.21 per cent a month ago.

In terms of the overall employment in the country in June, it dropped by 13 million to 390 million, against a gain of 8 million jobs in April and May.

According to CMIE’s managing director Mahesh Vyas, the count of the unemployed increased by only 3 million despite nearly 13 million lost jobs during the month as the rest quit the labor market.

This shrinkage brought down labour force participation rate to its lowest of 38.8 per cent, against 40 per cent in the preceding two months, he wrote in a piece published in Business Standard newspaper on Tuesday. While this sharp fall in employment and an equally sharp deterioration in the principal labor market ratios are alarming, the worsening of labor market is not widespread across the country, he opined.

Vyas further noted that rains were recorded being 32 per cent below normal, which could have “slowed the deployment of labor into the fields,” adding that labor participation may improve as monsoon picks up pace in the coming weeks.

In the month of June, around 8 millions were lost in the agriculture sector, mostly connected to plantations. However, crop cultivation added 4 million jobs, which was lower than the same period in 2020 and 2021, according to Vyas.