Unemployment In Urban India Nearing Hit Double-Digit Mark As COVID-19 Crisis Deepens 


  • Unemployment in urban India likely to touch a double-digit mark soon.
  • Support to the Indian economy coming from rural areas.
  • The rising joblessness rate may hamper the country’s economic activity.

The chances of economic recovery in the world’s second-most populous country – India – look bleak as the unemployment rate in the urban centres in India has touched its highest level in almost eight months – nearing a double-digit mark.

The 30-day rolling average of unemployment in urban India, as on date, stands at 9.7%, the levels last seen in September 2020, when the country was going through its worst phase of recession in the history.

At its peak level, on 12 May 2020, as much as 26.31%, making up more than one-fourth of the urban workforce in India, was jobless.

According to the data available with Centre for Monitoring Indian Economy (CMIE), the total unemployment in the country stands at 7.9% as on date – primarily due to the cushion provided by the rural regions. As agricultural activities in the country go on as usual, the rural unemployment is far lower than the urban – standing 260 basis points lower at 7.1%.

The unemployment rate – calculated as the proportion of people who are not able to find a job among the pool of active job seekers – has driven southwards due to the provincial lockdowns in the country.

As country is ripped by a raging COVID-19 pandemic, many worst-hit provinces – mostly the hubs of economic activity in the country – have announced partial lockdown. These restrictive measures have severely hit the people at the bottom of the rung, as daily wagers find it difficult to hunt jobs.

Experts believe that in next few days, the urban joblessness rate in the country might cross the double-digit mark as well.

This puts India’s economic recovery on a backburner. The Indian economy is mostly a demand-driven economy, and for long, even before the onset of the pandemic, the country was facing severe issues on the demand side with uncomfortable levels of unemployment. The International Monetary Fund (IMF) had pegged the Indian GDP to grow by over 12% in 2021 – the fastest in the world.

Meanwhile, the chief of the world’s largest vaccine manufacturer – Serum Institute India (SII) – Adar Poonawalla, is set to invest GBP240 million in facilities across the United Kingdom. Mr Poonawalla’s plans are part of a larger package of trade and investment deals with India worth US$1 billion, according to 10 Downing Street.

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