India’s unemployment rate climbed to the highest in more than two years in October as joblessness in rural areas increased, according to a private research firm.
The overall rate rose to 10.05% last month from 7.09% in September, data from the Centre for Monitoring Indian Economy Ltd (CMIE) showed, the highest since May 2021. Rural unemployment jumped to 10.82% from 6.2%, while the urban rate eased slightly to 8.44%.
The worsening rural employment comes as India is suffering from the worst monsoon rains in five years. However, economic activity has been rather solid in metropolitan areas, with manufacturing and consumption rising.
The government only publishes a national unemployment rate once a year, and a rate for metropolitan areas once every three months. According to the most current official report, released in October, the country’s unemployment rate for 2022-2023 is 3.2%.
Economists have grown to rely on CMIE statistics to provide a more accurate evaluation of the labor market. The data is based on monthly surveys of over 170,000 households.
While India’s economy is forecast to develop at a rate of more than 6% this year and the next, it is still not quick enough to produce jobs for the millions who enter the job market every year. According to CMIE data, approximately 10 million people entered the job market in October, expecting to find work.
The unemployment rate in India surged in December 2022 to 8.30 % but declined in January to 7.14 %. It edged up again in February to 7.45 %, the CMIE data released on Saturday showed.
In March this year, the unemployment rate in urban areas of India reached 8.4%, while in rural areas it stood at 7.5%, as per the available data.
Unemployment rate in March was the highest in Haryana at 26.8%, closely followed by Rajasthan at 26.4%, Jammu and Kashmir at 23.1%, Sikkim at 20.7%, Bihar at 17.6%, and Jharkhand at 17.5%.
More than half of the 900 million Indians of legal working age—roughly the population of the US and Russia combined—don’t want a job, according to CMIE data published earlier. Between 2017 and 2022, the overall labor participation rate dropped from 46% to 40%.
Last month, Indian tech-services outsourcing firms, including Infosys and Wipro, announced a plan to halt hiring of college graduates, potentially leaving thousands of fresh engineering students without jobs.
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