February 28, 2024


Delighting finance buffs

Urban unemployment rises once again in last week of May

India’s urban unemployment saw an increase of about 2.5 per cent between May 24 and 31, data released by a think-tank has said.

FILE PHOTO: Job seekers fill up forms as others line up for registration during a job fair in Chinchwad, India February 7, 2019. REUTERS

The urban unemployment rate in India rose to 25.14 per cent in the last week of May as compared to 22.72 per cent the previous week. However, rural unemployment showed improvement. As on May 31, it stood at 17.92 per cent, which is better than the previous week where this number stood at 25.09 per cent, the latest data released by the think-tank Centre for Monitoring Indian Economy (CMIE) has said.

Thus, the average unemployment in India came down to 20.19 per cent in the last week of May as compared to 24.3 per cent in the previous week, the data said.

This reduction in unemployment coincides with the resumption of several activities during the fourth phase of nationwide lockdown between May 17 and 31.

But the problem persisted for the salaried class as this segment did not see any increase in jobs in May.

“The sole segment that did not see any increase in jobs in May was that of the salaried employees. Even as the number of salaried jobs declined marginally from 68.4 million in April to 68.3 million in May 2020, it is much below than 86 million in 2019-20,” according to Mahesh Vyas, Managing Director and CEO, CMIE.

Mahesh Vyas said that while employment increased in all other age groups by different amounts, employment in the 25-29 year age group declined. The decline was small – from 30.8 million employed in this age bracket in April 2020 to 30.5 million in May 2020. Yet, being the only age group to suffer a fall in May besides those over 65 years of age, it stands out like a sore thumb.

The managing director said it would take a very long time to undo the damage suffered by a large number of families during the extended lockdown.

He also said, “The unemployment rate at 23.5 per cent in May 2020 was the same as it was in April 2020. But, the labour participation rate improved from 35.6 per cent to 38.2 per cent and the employment rate improved from 27.2 per cent to 29.2 per cent.”

According to CMIE’s latest data, while the main labour market metrics indicate an improvement in May compared to April, the labour market conditions still remain much weaker than they were before the lockdown.

According to CMIE data, amongst all states, Jharkhand has the highest unemployment rate at 59.2 per cent.

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