India’s unemployment rate in June lowest in last one year, reveals CMIE data

New Delhi: Employment in India declined the highest in a non-lockdown period in June, most likely due to patchy monsoon rains that delayed the deployment of agricultural workers in rural areas.

According to data issued by the Centre for Monitoring Indian Economy Pvt., the jobless rate increased to 7.8 percent of the overall workforce in June, up from 7.12 percent in May. The decrease was completely driven by an increase in rural unemployment, which rose to 8.03 percent in June from 6.62 percent in May, while urban unemployment fell to 7.30 percent in June from 8.21 percent a month earlier.

According to CMIE data, employment declined by 13 million in June to 390 million, after increasing by 8 million in April and May. While almost 13 million jobs were lost during the month, the number of unemployed climbed by only 3 million as the remainder left the labour market, according to Mahesh Vyas, managing director at CMIE.

This contraction reduced labour force participation to 38.8 percent, down from 40 percent in the previous two months. While the dramatic drop in employment and the corresponding deterioration in the key labour market ratios are concerning, the worsening labour market is not widespread across the country, according to Vyas.

Rainfall was 32 percent below normal, which may have "slowed the deployment of labour into the fields," he said, adding that labour participation may rise when the monsoon kicks up in the following weeks.

In June, the agriculture industry lost approximately 8 million jobs, the majority of which were associated with plantations. Crop cultivation, on the other hand, added 4 million employment, which was less than the same period in 2020 and 2021, according to Vyas.