Weak rural labour market pushes India’s unemployment rate above 8%

By Vrishti Beniwal

 

India’s unemployment rate rose above 8% for the third time this year on the back of seasonal joblessness in rural areas, according to data from a private research firm. 

 

The unemployment rate jumped to 8.45% in June from 7.68% in the previous month, according to the Centre for Monitoring Indian Economy Pvt. While unemployment in urban areas eased to 7.87% last month, rural India saw a two-year high of 8.73%.

June is typically a lean season for the agricultural sector, a key source of livelihood for the country’s rural population. Unemployment historically soars in India’s villages in June as harvesting ends in May and sowing for a new crop gathers pace only in July when monsoon progresses.  

High joblessness is a worry for Prime Minister Narendra Modi, who has been trying to burnish the credentials of his administration by distributing job appointment letters as part of his promise to provide one million government jobs by the end of this year. 

A persistent weakness in the labor market, particularly in rural areas where about two-thirds of the India’s population lives, could make his reelection bid in 2024 polls more challenging and put hurdles in the way of India’s world-beating economic growth.