Unemployment rate falls to pre-lockdown level; MGNREGA helps in rural areas: CMIE

India's unemployment rate has fallen to pre-lockdown level in the week ended June 21. The rate of unemployment stands at 8.5 per cent as against 27.1 per cent in the week ended May 3, Centre for Monitoring Indian Economy (CMIE) said. It stood at 8.75 per cent in March. "In the first three weeks of June the unemployment rate dropped dramatically to first, 17.5 then 11.6 per cent and now 8.5 per cent," CMIE Managing Director and CEO Mahesh Vyas said.

The urban unemployment rate has plunged sharply to 11.2 per cent in the week ended June 21. However, it is still more than 200 basis points higher than the average unemployment rate of 9 per cent in the 13 weeks preceding the coronavirus lockdown.

The rural unemployment rate fell to 7.26 per cent in the period under review. It is lower than 8.3 per cent seen in the pre-lockdown week ended March 22.  It is lower than the average unemployment rate in February and March 2020 which was 7.34 per cent and 8.4 per cent, respectively, Vyas noted.

"Aggressive use of the MGNREGA scheme by the government, timely rains and enhanced sowing activities seem to have helped engage rural India and bring the unemployment rate down," Vyas said.

Highlighting the latest efforts  by the government through measures such as Garib Kalyan Rojgar Yojana, Vyas said: "Nevertheless, rural unemployment can be expected to remain low till October at least. These efforts can also be expected to raise consumption demand from rural India."

Similarly, the employment rate, which fell to 29.9 per cent immediately after the lockdown imposition and plunged further to 26.1 per cent in the week ended April 19, started recovering in early May. It increased from 32.4 per cent in the week ended June 7 to 35.7 per cent in the week ended June 14.

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