The rate had gone up from 8.75% in March to 23.5% in April and May. It had peaked at 27.1% in the week ended May 3. The CMIE survey showed the gains in rural areas may even be bigger in the months ahead. The latest data on the jobs front provides huge relief to the government which has been grappling with job losses due to the coronavirus pandemic.
In the first three weeks of June, the unemployment rate dropped dramatically to 17.5%, then 11.6% and now 8.5%, according to the CMIE survey, as more towns and cities emerge from the lockdown and economic activity starts gathering pace.
The heartening story is that rural India is witnessing an increase in jobs thanks to the rural job guarantee programme.
“The big gain in employment is happening in rural India. And, it may see bigger gains in the months to come or at least sustain the current gains,” Mahesh Vyas, managing director and CEO of CMIE, said.
He said the unemployment rate dropped to 7.26% in rural India in the week ended June 21. This is lower than it was in the pre-lockdown week ended March 22 when the rate was 8.3%. It is lower than the average unemployment rate in February and March which was 7.34% and 8.4%, respectively. It is much lower than the average 13-week lockdown period average of 20.3% but still a little higher than the 13-week average pre-lockdown rate of 6.8%.
“While relaxation of the lockdown has helped in alleviating the unemployment stress in general, rural India has apparently gained by the massive sudden increase in Mahatma Gandhi National Rural Employment Guarantee Scheme activities and also by a sharp increase in kharif sowing this year,” Vyas said.
He added that person-days of jobs created in May shot up to 565 million. This is way higher than any time in the recent past. It was 53% higher than the 370 million person-days of jobs created under the scheme in May 2019. It was 2.55 times the average monthly person-days of jobs created in 2019-20. The survey said 33 million households benefitted from the scheme in May. This again is 55% higher than the number of households that benefitted a year ago, according to Vyas.
Partial data for June suggests that the scheme continues to power its employment relief measures aggressively. The number of person-days of jobs was 65% of the year-ago figure while the number of household beneficiaries was 95% of the year-ago beneficiary households, according to CMIE.
“Aggressive use of the MGNREGA scheme by the government, timely rains and enhanced sowing activities seem to have helped engage rural India and bring the unemployment rate down,” Vyas said.
According to Vyas, the overlap of Garib Kalyan Rojgar Yojana with MGNREGA is unclear. “Nevertheless, rural unemployment can be expected to remain low till October at least. These efforts can also be expected to raise consumption demand from rural India,” he said, pointing to measures unveiled by the government to ease the stress in rural areas through programmes such as the Rs 50,000 crore Garib Kalyan Rojgar Yojana launched across six states.
In Video:Unemployment rate back at pre-lockdown levels