Rural unemployment rate shoots to 8.03% in June on weak monsoon

The unemployment rate in India in June climbed to 7.8% of the total workforce from 7.12% in May, led by a rise in rural unemployment, as per data from the Centre for Monitoring Indian Economy (CMIE). Patchy monsoon rains have delayed the deployment of agricultural labour in rural areas.

India’s June employment is at the lowest in the last one year, CMIE said.

Unemployment rates in the rural areas claimed to 8.03% from 6.62% in May, while urban unemployment shrank to 7.30% in June from 8.21% a month ago. The overall employment in India in June fell by 13 million to 390 million, against a gain of 8 million jobs in April and May.


Mahesh Vyas, the managing director at CMIE, has opined that while around 13 million lost jobs during the month, the count of the unemployed increased by only 3 million as the rest exited the labor market.

In an article published on Business Standard newspaper Tuesday, he wrote that this shrinkage, brought down labour force participation rate to its lowest of 38.8%, against 40% in the preceding two months. While this sharp fall in employment and an equally sharp deterioration in the principal labor market ratios are alarming, the worsening of labor market is not widespread across the country, Vyas wrote.

Rains were recorded being 32% below normal, which could have “slowed the deployment of labor into the fields,” he said, adding that labor participation may improve as monsoon picks up pace in the coming weeks. The agriculture sector shed nearly 8 million jobs in June, mostly connected to plantations. However, crop cultivation added 4 million jobs, which was lower than the same period in 2020 and 2021, according to Vyas.

(With agency inputs)