Unemployment rate rises to 7.5% during Sept-Dec; high among educated youth: CMIE

India's unemployment rate rose to 7.5 per cent during September-December 2019, according to data released by think-tank Centre for Monitoring Indian Economy (CMIE) on Monday. The unemployment rate was even worse in case of educated youth which rose over 60 per cent, indicating that 2019 was the worst year for these young graduates.

"This was the seventh consecutive wave to record an increase in the unemployment rate since May-August 2017 when the unemployment rate was 3.8 per cent," says CMIE report.

As per CMIE survey, which was conducted on a sample of 1,74,405 households, the unemployment rate in rural India was lower than urban India, which scaled up to 9 per cent. The urban unemployment numbers were higher than the national average, reflecting a decline in economic activity in the country.

In rural India, the unemployment rate stood at 6.8 per cent over a period of four months from September to December 2019. It is notable that rural India accounts for the lion's share of 66 per cent of the overall estimate of India's unemployment rate.

"Rural India has a low unemployment rate and this has a big impact on lowering India's overall unemployment rate. But, rural employment is of poor quality," CMIE report said.

The report highlighted that the unemployment rate in the urban youth, especially educated one, was very high. "While youngsters in the age group of 20-24 years reported an unemployment rate of 37 per cent, graduates among them reported a much higher unemployment rate of over 60 per cent. The average unemployment rate for them during 2019 was 63.4 per cent."

As per the report, this was much higher than the unemployment rate graduates faced in any of the preceding three years. The unemployment rate in 2016 stood at 47.1 per cent, while it was at 42 per cent in 2017 and 55.1 per cent in 2018. Therefore, 2019 saw a very severe worsening of conditions for the young graduates.

For graduates between 20-29 years of age, the unemployment rate was at 42.8 per cent, which poses a real challenge for India. "An equally important challenge is that graduates of all ages put together also have a very high unemployment rate of 18.5 per cent" the report said.

In a similar trend, the unemployment rate for post-graduates also remained high but it has not deteriorated since 2016, when it was 24.6 per cent. In 2017, it increased to 25.4 per cent, then fell to 22.3 per cent in 2018 and rose again to 23 per cent in 2019.

The report showed that employment prospects for age group between 20-24 years, who are looking for jobs, are not much better. The unemployment rate for this age group has spiked more than double to 37 per cent in September-December 2019 from 17 per cent in May-August 2017. Similarly, it has risen from 8 per cent in May-August 2017 to 11 per cent for youngsters between 25 and 29 years of age.

For age group between 15-19 years, the unemployment rate stood at 45 per cent. "But, arguably, this is not the age at which youngsters should be looking for jobs. Ideally, they should be still studying at this age. However, if, for any reason, they do look for jobs, it is evident that they find it very difficult to find one," the report said.

Bucking the trend, the unemployment rate fell sharply from the age of 30, which "implies that beyond a point in age, people settle for whatever jobs become available". It drops to 2.5 per cent for the age group 30-34 years and then it declines to nearly 1 per cent and then less than 1 per cent.

Recently, a CMIE report showed that unemployment rate in India increased to 7.7 per cent in December 2019, slightly higher than 7.48 per cent reported in the previous month. In November, the unemployment rate had fallen nearly 1 per cent to 7.48 per cent compared to a three-year high of 8.45 per cent in October 2019.

Also Read: India's unemployment rate rises to 7.7% in December: CMIE

Also Read: Unemployment rate falls to 7.48% in November; labour participation rate lowest since 2016: CMIE