Unemployment in rural areas spiralled to 14.34 per cent in the week ended May 16 from 7.29 per cent in the week ended May 9, according to the data released by the Centre for Monitoring Indian Economy (CMIE).
Rural unemployment is at a 50-week high, the last time it had touched a high was nearly a year ago, during the week ended June 7, 2020. Similarly, urban unemployment climbed to 14.71 per cent, three percentage points more than a week ago, while the national unemployment rate soared to 14.45 per cent from 8.67 per cent, underlining an acute job crisis amid the second Covid wave.
Economists said the high infection rate and lack of employment opportunities in urban clusters due to lockdowns forced people to leave for their villages. But in rural pockets, there aren’t enough income opportunities. Besides, rural lockdowns and curfews have left people jobless both in formal and informal sectors, and a lull in farm activity in May is adding to joblessness.
“The urban houses and rural hamlets have got infected with the coronavirus this time. Unorganized manufacturing in rural and semi-urban India has largely come to a halt. This is increasing unemployment across India both in the formal and informal sector,” said Santosh Mehrotra, a labour economist and retired professor of Jawaharlal Nehru University.
The MSMEs (micro, small and medium enterprises) are in bad shape, and the informal jobs market, as well as self-employment in rural India, are in turmoil. The situation may get worse over the next few weeks if govt don’t manage to tackle the pandemic in rural India. There is a demand shock, there is a supply chain constraint, and there is income loss—it’s a critical situation for any economy and labour market according to economist.
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