India’s Unemployment rate – Recent Trends

January 3, 2022

The Centre for Monitoring Indian Economy (CMIE) recently released the unemployment status report of India for the month of December, 2021. According to the report, the unemployment rate in the country was 7.91% in December. It was 7% in November.

Highest Unemployment Rates

Highest unemployment rate was reported in Haryana. Around 34.1% were unemployed in the state.
Rajasthan had the second highest unemployment rate. It was 24.1% in the state. Following Rajasthan, Jharkhand (17.3%), Bihar (16%) and Jammu and Kashmir (15%) were in second, third and fourth places respectively.
The December unemployment rate was the highest in the past four months. The previous high was reported in August, 2021 (8.32%).
The urban unemployment rate of the country was 9.3%. It was 8.21% in November.
The rural unemployment rate was 7.28%. It was 6.44% in November.

Lowest Unemployment Rates

The lowest unemployment rate was recorded in Karnataka (1.4%). Karnataka was followed by Gujarat and Odisha with an unemployment rate of 1.6%, Chhattisgarh (2.1%), Telangana (2.2%).

Key Findings

The states were forced to impose restrictions due to increasing Omicron cases in the country. For instance, the capital closed gyms, schools and cinemas. States such as Haryana and West Bengal restricted public gatherings and imposed other similar curbs. This hit the economic activities very badly and increased the unemployment rate. The pandemic is shutting down the labour markets all over the world. This has huge impact in India where one million enter the job market every month.

Significance of the report

The report is used by researchers and economists as the most reliable data. This is because India lacks nationwide official unemployment data. CMIE is a business information company. It was established in 1976. It creates business and economic databases. Also, it delivers specialised analytical tools to its customers.

How is unemployment rate defined?

It is measured as the percentage of number of unemployed (X) among the total number in labour force (Y). Mathematically, it is expressed as X/Y * 100. The total labour force is the number of unemployed and employed.

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