RURAL INDIA PUSHES UP UNEMPLOYMENT IN FEBUARY
08, Mar 2019
Prelims level : Economy Mains level : Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.
CMIE report on unemployment.
- Estimated unemployment rate shot up to a 29-month high of 7.23 per cent in February 2019 and the numbers of those employed fell by 56.6 lakh over the last 12-months led by job losses in rural areas and especially in Uttar Pradesh, Karnataka and Bihar. Data shows that while the total number of employed dropped from 40.59 crore in February 2018 to 40.01 crore in February 2019, that in rural India dropped from 27.53 crore to 27.07 crore in the same period.
- A look into the rural employment figures of states show that the number of those employed in rural UP alone declined from 4.4 crore to 4.19 crore accounting for a decline of 25 lakh jobs during the period.
- While the rural Karnataka and Bihar saw the number of employed drop by 15 lakh each, Gujarat witnessed a reversal as the number of those employed rose from 1.14 crore in Feb 2018 to 1.33 crore in Feb 2019, thereby witnessing an addition of almost 19 lakh.
- CMIE has, however, revised its initial estimates for December 2018 (released in January 2019), that showed the unemployment rate at 7.38 per cent. The revised CMIE figures show that it was at 7.02 per cent for December 2018. It has now risen to 7.23 per cent in February 2019, the data shows. The unemployment rate of 7.23 is the highest since September 2016 when it stood at a high of 8.46 per cent.
- The estimates provided by CMIE database on “Unemployment Rate in India” is based on the panel size of over 1,58,000 households. The CMIE data, however, also shows that alongside the rise in unemployment, there has been a dip in the labour participation rate.
- A breakup of the rural and urban job numbers shows that a large part of the drop-in employment over the last 12-months is on account of job losses in rural areas. Out of the 56 lakh job losses, almost 82 per cent or 46 lakhs were from the rural areas.
- The rural employment numbers fell from 27.53 crore in February 2018 to 27.07 crore last month. The rural unemployment rate over the last 12-months has shot up from 5.53 per cent to 6.98 per cent.
- In line with a dip in the employment rate, the CMIE data shows that there has been a dip in the estimated labour participation rate (LPR) — proportion of working-age people (which is people of 15 years or more) who are willing to work and are either actually working or are actively looking for work.
- The unemployment rate is the proportion of the labour force that is unemployed. While the LPR stood at 43.77 per cent in February 2018, it declined to 42.74 per cent last month. In January, however, the unemployment rate and labour participation stood at 7.05 per cent and 43.18 per cent.
CMIE, or Centre for Monitoring Indian Economy, is a leading business information company. It was established in 1976, primarily as an independent think tank.