October saw the unemployment rate in India jump to 7.77 per cent compared to 6.43 per cent a month before that, i.e. in September, according to data released by Centre for Monitoring Indian Economy (CMIE), which is both an economic think-tank as well as a business information company.
6 out of the 25 states showed an unemployment rate in double figures. These included Haryana at 31.8 per cent, Rajasthan 30.7 per cent, Jammu and Kashmir at 22.4 per cent, Jharkhand at 16.5 per cent, Bihar at 14.5 per cent and Tripura at 10.5 per cent, as per IANS report.
Madhya Pradesh recorded the lowest unemployment rate at 0.9 per cent, followed by Chhattisgrah at 0.9 per cent, Odisha at 1.1 per cent and Gujrat at 1.7 per cent.
The CMIE data further revealed that the rural unemployment rate rose to 8.04 per cent in October from 5.84 per cent in September.
At the same time, the urban unemployment rate dropped to 7.21 per cent in October, compared to 7.7 per cent in September.
So it was the significant increase in rural unemployment rate that pushed the overall unemployment rate in India last month, thus reversing the decline seen in September, as per ET report. September¡¯s 6.43% was India¡¯s lowest unemployment rate in four years.
Also, the rise in the unemployment rate in October was accompanied by a small drop in the labour participation rate (LPR), from 39.3 per cent in September to 39 per cent in October.
A falling LPR, when accompanied by an increasing unemployment rate, effectively means that the employment rate has been falling, according to CMIE.
"The persistent fall in the LPR is a matter of grave concern because it suggests that an increasingly smaller proportion of the working age population is willing to be employed," CMIE said, as per ET report.
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It mentioned that the total number of employed fell down by 7.8 million from 404.2 million in September to 396.4 million in October this year. Further, the number of unemployed rose by 5.6 million and about 2.2 million quit the labour markets, resulting in India's labour force shrinking from 432 million in September to 429.8 million in October.
However, the report added, the decline in employment was mostly in rural India and mainly in non-agricultural rural India. The daily wage labourer segment was the most hit, as it shrunk by nearly 15 million.
The think-tank CMIE said that these figures suggested that employment opportunities in rural India during October "were highly constrained¡±.
But urban India showed an increase of 2.26 million salaried jobs, pushing the total number of such jobs to cross 51 million. ¡°This is the highest level in the past 44 months but urban India is much smaller than rural India and therefore its gains cannot entirely offset the losses in rural India,¡±? economic think-tank CMIE added.
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