The labour participation rate in September saw an uptick in rural areas as compared to August, while in urban areas there was a fall.
Reinforcing the notion that economic activities have picked up due to the festive period, India’s unemployment rate dropped to a 12-month low of 7.09% in September. Joblessness in urban areas saw a sharp decline from 10.09% in August to 8.94% in September, indicating brisk hiring of field-level staff before the Diwali.
According to the data released by the Centre for Monitoring Indian Economy, the rural unemployment rate was also at a 12-month low of 6.20% in September. The drop in rural unemployment comes in the back of September receiving surplus rainfall. The country had received 13% more rainfall than normal during the month. In August, however, the rainfall was 36% below normal.
The fall in rural employment rate in September also resulted in a fall in demand for work under the Mahatma Gandhi National Rural Employment Guarantee Scheme, which remained elevated for several months. According to the official dashboard, the number of persons demanding work under the scheme in September was the lowest in the current financial year. The number of person days generated (work provided) in September was also the lowest so far in FY24.
The labour participation rate in September saw an uptick in rural areas as compared to August, while in urban areas there was a fall.
“Agricultural sector is still monsoon dependent. The gross capital formation (GFCF) in the agriculture sector is declining. So, if there is an erratic monsoon, it affects the economic activity and labour force participation,” said Lekha Chakraborty, professor, National Institute of Public Finance and Policy.
At 41.82%, the rural labour participation rate was the highest in 23 months. However, at an all India-level, the labour participation rate decreased marginally to 40.87% in September from 41.16% in August.
Source:financialexpress.com