Unemployment hits 3 year high

Data released by the Center for Monitoring Indian Economy (CMIE) shows unemployment in the month of October 2019 has reached a 3 year high of 8.5%. The last time unemployment was higher was in August 2016 when it stood at 9.6%.

Urban unemployment has gone upto 8.89% from 7.33% in Nov’18 while rural unemployment has gone from 6.32% to 8.28% in the same time. In the past, urban unemployment always remained 1-2 percentage points above rural. However, the gap has narrowed to 0.6 in Oct’19, indicating high stress on the rural population.

One possible explanation for the rise in rural unemployment which stood at 6% only a month ago is believed to be early harvesting of crops in several parts of the country – mainly due to erratic weather. Typically, monsoon season closes in early October in India but this year, several parts of the country continued to receive rains deep into the month as well affecting usual cropping cycles.

At a time when consumer demand has been sluggish especially in rural, the rise in rural unemployment will be a cause of concern for the government.

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