NEW DELHI: Joblessness is on the rise, driven by urban unemployment, which breached the 9% mark to stand at 9.12% till 14 August. According to data by the Centre for Monitoring Indian Economy (CMIE), the joblessness rate in the country has touched 7.71% as of August 14, driven majorly by urban unemployment which has crossed 9%, standing at 9.12% as of August 14.
Experts were hoping that unemployment would come down owing to the good monsoon and festive season. The unemployment rate in India had come down to a six-month low in July at 6.80%, as against 7.80% in June, driven by a fall in rural unemployment.
The rural unemployment rate saw a significant fall to 6.14% in July as against 8.03% in June. Experts had earlier suggested that the fall in rural unemployment in July could be due to steady monsoons, which have led to a pick-up in agricultural activity. However, as of August 14, rural unemployment has increased to 7.05%.
The urban unemployment rate, at the same time, has been on the rise and increased to 8.21% from 7.30% in June, before it breached the 9% mark by mid-August. The average urban unemployment rate has been well over 8% in the past 12 months, as per CMIE data.
One reason behind India’s endemic unemployment despite high growth, according to Ajoy Thomas, Vice-president and Business Head (Retail, e-commerce, logistics, transportation), TeamLease, is the country’s leapfrogging from a primary farm economy to a booming services economy. “In no other country of India’s size has seen growth led by services and not manufacturing,” he said.
“India’s growth has been powered by high-end services like software and finance manned by highly-skilled workers. There have been a few manufacturing or factory jobs that can absorb a large number of unskilled or low-skilled workers,” Thomas explained.
Meanwhile, sources have said that the government has no plans to start an urban job scheme like MNREGA. A finance ministry official said on the condition of anonymity that during the budget a lot of recommendations on urban MNREGA had come, but the government has no such plans immediately.
Even as Prime Minister Modi in his speech on Monday mentioned green jobs, and drone-related policies, saying they have opened up new doors of opportunities for the youth of the country, the situation as per CMIE data, when it comes to jobs, does not look buoyant.