Unemployment Rate in India Rises to 8.5%, Highest in 3 Years

Despite the government’s efforts to curb unemployment in the country, the situation is getting worse. The unemployment rate in India rises to 8.5% in October 2019, the highest in three years.

The Downturn

Recently, Centre for Monitoring Indian Economy (CMIE) released a report revealing an increase in India’s unemployment rate from 7.2% in September to 8.5% in October 2019. This is highest in three years after an increase of 9.59% in August 2016. On the contrary side, data by CIME also showed an increase of 25 lakh in total employment in 2019.

The state-wise unemployment rate was highest in Tripura and Haryana, being more than 20%. Unemployment lowest at (1.1%) in Tamil Nadu followed by 1.2% in Puducherry. The urban unemployment rate stood at 8.3% which is more than 7.5% in the rural sector in October 2019.

The paper released by the Centre of Sustainable Employment concluded that this is a significant decrease in the time frame of seven years (2011 to 2018). Adding to this, a research paper by Santosh Mehrotra and Jajati K Parida pointed to a decrease of nine million in total unemployment.

Industry Performance

Seven out of eight crore industries in India hit by the economic slowdown. India’s infrastructure output declined to 5.2% in September year on year basis. This is the fastest decline in Industrial output in six years. Observing this, many manufacturers have decreased production adding more to unemployment. Experts believe that the unorganized sector is the worst hit by this decline. Daily wage laborers and seasonal workers have suffered largely because of the economic slowdown.

Coal production dropped by 20.5% and crude oil by 5.4%. The production of natural gas also declined by 4.9%. CIME reports stated that if the situation persisted, it may avert workers from entering the labor market further adding to the problem.

To conclude, unemployment is one of the effects of the slackening economy. Though 40.94 crore people were employed till September 2019, the shrink in employment rate is more thus overpowering the increase.

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