India's Unemployment Rate Touches 7.9 %, Highest Since August 2021

New Delhi: Just when it seemed like the unemployment rate in India was getting back on track, the latest report by the Centre for Monitoring Indian Economy (CMIE) has shown that the unemployment rate has again suffered a setback.

According to this report, the unemployment rate in the country surged to 7.9 percent in the month of December as compared to 7.0 percent in the previous month.

Prior to November, the highest unemployment rate was recorded at 8.3 percent in the month of August this year.

This decline can be attributed to the decrease in economic activity clubbed with the change in the consumer sentiments in the country as a result of the sudden spike in covid cases due to the omicron variant in December.

Many affected states have re-imposed new restrictions to contain its spread which has led to the plunge in economic ventures in India.

The CMIE report also mentioned that there was a sudden surge in urban employment from 8.2 percent in November to 9.3 percent in December.

While on the other hand, rural unemployment rate has gone up north to 7.3 percent from 6.4 percent according to the report.

Unemployment has been hit hard since last month despite an increase in self-employment in the last few weeks primarily due to the shift towards rural agricultural production by a lot of affected people.

Lawmakers and economists have cited a perturbing trend and have feared that the economic recovery recorded in the previous quarter could be reversed because of the surging omicron cases.

Earlier, India's unemployment rate witnessed a recovery in the month of September when it was recorded at 6.86 percent as opposed to 8.32 percent in the previous month.

Economists were hopeful of a positive rise in the graph as covid cases declined in the previous quarter.

The rural sector saw additional job creation due to the reverse migration of the working population from urban areas to rural areas.

The reverse migration was clearly evident during the first covid wave when a massive number of labourers and workers marched towards their hometown after losing their jobs.

Despite the growth in India's Gross Domestic Product (GDP), the slump in the unemployment rate speaks of a worrisome trend as far as the overall economic growth of the country is concerned.

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