Unemployment Rate

Unemployment has always been a major economic issue in India. The growing population and the inability to create new jobs at the same pace are creating a demand and supply gap in the market. The latest data that has been released by a research firm Centre that monitors the economy of India shows that the Unemployment rate in India has hiked up to be the highest in the last four months.

India, the third largest economy in Asia, does not have enough jobs available for the entire workforce it has. As more people are joining the workforce, it is becoming hard for the government to provide work to every worker in the country.

The population of India is one of the key factors behind the unavailability of enough jobs. Population factors along with the creation of jobs remain a great problem for the ruling government of India, especially when the party aspires to win the 2024 Parliament elections.

On the national level, the unemployment rate rose to 8.11 percent in April, which is the highest in the last four months. In March, this rate was 7.8 percent. The unemployment rate in urban areas stands at 9.81 percent in April, while it was 8.51 percent in March. However, the joblessness rate in rural areas has shown a slight decline. It has fallen to 7.34 percent from 7.47 percent in March.

The participation rate of people in the labor force increased by 41.98 percent in April. The reason behind this is assumed to be the optimistic attitude of people about getting unemployment. This increased rate of participation of people in the workforce is the highest in the last three years.

A big chunk of the existing labor force which equals to its 87 percent, was able secure a job. This was possible owing to the creation of 22.1 million jobs in April. Also according to the data, more jobs were created in the rural sector as compared to the jobs that were created in the urban sector.

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Of the total number of people who joined the workforce in rural areas, 94.6 percent of them were able to secure employment. However, the same does not hold for employment in urban areas of the country since only 54.8 percent of the workforce in the urban areas who were seeking new jobs secured a new job.

Reserve Bank of India recently released its April bulletin that said the demand for employment under the MGNREGA scheme that expands for Mahatma Gandhi National Rural Employment Guarantee Act has been steady since January. The reason stated by RBI for this is the recovery in the employment in informal sector along with the better sowing of winter crops.

However, overall, the unemployment rate in India has shown an upward rise which is a huge challenge for the economy and for the government to tackle it. Ensuring the creation of jobs keeping in mind the population of the country is an overwhelming task.