Indian unemployment falls to 6.8% in July
Indian unemployment rate fell to 6.8% in July, the lowest level in six months, as farming activity increased during the monsoon season, according to data from the Centre for Monitoring Indian Economy (CMIE).
The unemployment rate dropped from 7.8% in June, with rural unemployment declined to 6.14% from 8.03% in June, CMIE said.
However, on the downside, urban unemployment jumped to 8.21% in July from 7.8% in June, with the number of jobs falling in both industry and the services sector.
CMIE Managing Director and CEO Mahesh Vyas said the” month-on-month recovery in employment was partial as the fall in June was 13 million compared to the growth of only 6.3 million jobs in July”.
The agriculture sector in rural areas absorbed an additional 9.4 million workforce in July, while it shed 8 million in June, Vyas added.
This lower-than-expected absorption of labour into agriculture in July reflects the patchy progress of the southwest monsoon and the correspondingly poor kharif sowing this year.
This year rainfall so far has been very poor in Uttar Pradesh and Bihar, Vyas said, adding that data available at the end of July showed that rice cultivation was down 13%.
Vyas said: “However, I expect the monsoon to improve going forward, which will have a positive impact on the employment scenario in rural areas.”
He added that the industrial sector lost 200,000 jobs in July after having lost 4.3 million during June, while the services sector lost 2.8 million jobs in July after having lost 800,000 in June.
CMIE’s figures show that the industrial and services sectors have been losing jobs for two months, Vyas added. In May, employment in the industrial sector had shot up to 108 million, but since then it has declined to 104 million in June and July.
The recovery in industrial jobs was essentially in the construction industry and not in manufacturing, which are of better quality, Mr. Vyas noted.
More than 8 million non-farm jobs were lost during June and July, both in the industry and services sectors.
“There is a need for more investments to take place, which is likely to take some time. However, we don’t expect any drastic deterioration in the unemployment scenario in the country,” Vyas added.
Trade talks continue apace
Negotiation over a free trade agreement between India and the UK are continuing to make rapid progress, according to commerce and industry minister Piyush Goyal. The proposed tie-up is aimed at boosting bilateral trade and investments between the two countries.
India has signed a trade pact with the UAE in “record time”, Goyal said talks with the UK “are moving at a faster pace”.
The proposed bilateral agreement aims to significantly reduce or eliminate customs duties on trade in goods and services between the two countries.
India and the UK formally launched talks for a free trade agreement in January 2022. They have set the deadline for concluding talks by Diwali (24 October). India is also negotiating similar trade deals with Canada, the European Union (EU) and Israel, the minister said, adding that several other nations have shown keen interest in negotiating trade agreements with India.
The Gulf Cooperation Council (GCC), Eurasian Economic Union (EAEU) and European Free Trade Association (EFTA) want to negotiate these pacts, he said.
However, he added that the commerce ministry does not have enough resources to simultaneously negotiate a free trade pact with more nations. GCC is a union of six countries in the Gulf region, namely Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE.
EFTA members are Switzerland, Norway, Iceland and Liechtenstein. The five-nation EAEU comprises Russia, Armenia, Belarus, Kazakhstan and Kyrgyzstan.