Jobs stagnate, unemployment rate rises: CMIE
The 7.17 percent unemployment rate for May 2019 reflects the stark truth of urban India--the increase in the number of jobs has not met the rising demand for employment, according to a report released by the Centre for Monitoring Indian Economy.
Even though the unemployment rate for May 2019 is slightly better than that of April (7.35 percent), the rate still remains higher than the average of 6 percent levels back in 2018.
The unemployment rate is likely to continue to grow given that jobs are less in supply compared to the rising demand. By May 2019, about 11.8 million people were unemployed in urban areas. As compared to May 2018, this number is almost 41 percent higher when about 8.4 million were unemployed.
A part of the reason could be that the national elections drove up the demand for people who would organize campaigns. Some of the people who entered the labor market in order to help out campaigns got jobs while others failed, and those are the people who count as unemployed, according to the report from CMIE.
However, even prior to the election season, the unemployment rate has remained on the higher side. The start of 2019 saw the unemployment rate for Indian cities at 8.58 percent in January while the average urban unemployment rate for the first five months of the year was 8 percent. This is a sizeable increase when compared to the same first five months of 2018 when the unemployment rate was 6.1 percent.
The formal sector is bearing the brunt of the consequences stemming from lower private investment activity which fueled the creation of more jobs in this sector.
Going forward into the year, the CMIE expects the unemployment rate to grow as more and more people continue to enter the labor market and are looking for jobs. It remains to be revealed as to which sectors and industries are able to absorb these job seekers and provide the type of livelihood that urban India is looking for.