The unemployment rate of rural India stands at 11% while that of urban India stands at 13%.

In what can be seen as a sign of revival in economic activity, unemployment is back at pre-lockdown levels. Falling for the second consecutive week, the unemployment rate now sits at 11.6%, according to the weekly data released by CMIE. The unemployment rate was reported at 17.5% in the first week of June, down from 23% in April and May. This is the lowest unemployment rate since the lockdown began in March. The unemployment rate was at 8.4% in March, and it shot up to as high as 27% in May.

The fall in unemployment is mirroring the jump that the indicator saw when the lockdown was imposed to tackle the spread of coronavirus. “The labour participation rate was 40.4% in the week ended June 14. The rate had fallen from 42.6% in the week ended March 22, which was just before the lockdown to 39.2%t in the first week of the lockdown and the further to 36.1% in the first week of April,” CMIE said. The data shows that labour participation is close to levels of the pre-coronavirus job market. Labour participation has been improving smartly since April. The surge in labour participation along with a fall in the unemployment rate implies an increase in the employment rate. “This, an increase in the employment rate, is the desired outcome. It, in fact, is a far more important indicator of the health of the economy than the unemployment rate,” it added.

With the lockdown imposed from the last week of March, industries were asked to halt businesses temporarily, pushing urban India’s unemployment rate to close to 30% in April. This resulted in a large number of migrants taking the streets marching back to their villages. However, with the lockdown being lifted partially and industrial activity allowed, the recovery in the jobs market has been sharp. 

Falling unemployment rate hints at the revival of economic activity and the return labour to the job market that will act as a catalyst in pushing industrial activity. However, with the large migration of labour during the lockdown period, the recovery in labour markets has been better in rural India than in urban India. Rural India’s labour participation has recovered to 95.4% of its pre-lockdown-week level. In contrast, in urban India, labour participation has recovered lesser, at 93.2% and the unemployment rate is 51.3% higher than it was in the pre-lockdown-week, data showed. The unemployment rate of rural India stands at 11% while that of urban India stands at 13%.