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India’s unemployment rate declined to “a pre-lockdown level of 8.5 per cent” in the week ended June 21, think-tank Centre for Monitoring Indian Economy (CMIE) said on Monday. Earlier, the rate had spiked to 27.1 per cent in the week ended May 3, compared to 8.75 per cent in March. The latest data on unemployment from the private sector think-tank comes at a time that the country is attempting to bring economic activity back on track, as part of Unlock 2.0, post the 2-month long lockdow imposed to stem the spread of coronavirus.
“Many towns have started opening up. Some of the larger ones have oscillated from reduced restrictions to strict lockdowns. Chennai is an example. Delhi is somewhat similar. Mumbai remains under lockdown but with evident significant relaxations,” said Mahesh Vyas, managing director and CEO of the Mumbai-based CMIE.
The urban unemployment has fallen sharply to 11.2 per cent In the latest week ended June 21, but is still over 200 basis points higher than the average unemployment rate of 9 per cent in the 13 weeks preceding the lockdown.
Rural India has witnessed a big gain in employment, possibly due to the massive jump in Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA) work and sharp rise in kharif sowing this year. The unemployment rate dropped to 7.26 per cent in rural India in the week ended June 21, which is lower than 8.3 per cent seen in the pre-lockdown week ended March 22. It is also lower than the average unemployment rate in February and March 2020, which stood at 7.34 per cent and 8.4 per cent respectively.
The government continued to focus on the rural sector, with Prime Minister Narendra Modi launching the Garib Kalyan Rojgar Yojana last week to alleviate the problem of migrant workers who have
returned to their villages.
Economic growth had slumped, to an 11-year low even before the full onset of coronavirus, and economists say the real impact of the pandemic on the ailing economy will be visible in the June quarter.
Many economist groups have lowered their growth projections for the current financial year due to the damage caused by the COVID-19 outbreak, with some even warning of the worst recession in years.