Unemployment rate drops to 6.8% in July driven by a recovery in rural India

The all-India unemployment rate dropped to a 6-month low of 6.8% in July, as per the latest data released by CMIE.

The drop in all-India unemployment is driven by a partial recovery in rural India. After the loss of 13 million agricultural jobs last month, 6.3 million agricultural jobs were added in July. The industrial and services sector continued to bleed jobs. The industrial sector lost 0.2 million jobs in July after having lost 4.3 million in June. The recovery in the industrial sector in July is primarily in low-quality jobs like construction and not in manufacturing. The services sector lost 2.8 million jobs in July after having lost 0.8 million in June.

Joblessness in urban India was much higher at 8.2%, compared to 6.1% in rural India. The comparatively better employment levels in rural India are due to the increased intake of agricultural labour which increased by 6.9 million in July while urban employment fell by 0.6 million. The average urban unemployment rate has remained over 8 percent in the past year. 

As per the MD of CMIE, Mahesh Vyas, "The lackluster performance of the non-farm sectors and the urban regions leaves labour seriously vulnerable to any failure of the monsoon".

Haryana recorded the highest level of unemployment at 26.9% across India in Jul'22, followed by Jammu & Kashmir at 20.2%. Chhattisgarhrecorded the lowest level of unemployment across India in Jul'22 at 0.8%, followed by Odisha at 0.9%.