Employment levels: Why green-shoots evade select states in North

Amid green-shoots in the nation’s jobs scenario, the sharp differences in unemployment rates from region to region are posing a challenge. About a dozen states and Union Territories (UTs) defied the national trend to post high levels of joblessness last month, according to a report.

The Centre for Monitoring Indian Economy (CMIE) said earlier this month that India’s unemployment rate dropped sharply to 6.86% in September, against 8.32% in August, with the addition of 8.5 million new jobs. Most of the new jobs were created in rural India, thanks to a pick-up in construction activity.

Also read: Why the small Indian farmer relies more on wages than crop income

However, said the Mumbai-based economic thinktank, joblessness in 12 states and UTs witnessed substantial increases in September. Of these, eight saw double-digit unemployment rates, mostly due to the pandemic impact, a Mint report quoted the CMIE as saying.

Worst-hit states

The national capital was among the worst hit, with joblessness standing at 16.8%, which marked a four-month high for the UT. Joining it in the double-digit ranks were Rajasthan (17.9%), Haryana (20.3%), Jammu and Kashmir (21.6%) and Bihar, Tripura, Jharkhand and Puducherry (at 10% to 15.3% each), said Mint.

It pointed out that Delhi’s unemployment rate has been on the rise over the recent months. From 8.8% in June, it rose to 10.7% in July and 11.6% in August. From there, it jumped a sharp 5.2 percentage points to 16.8% last month.

The report, citing economists and experts, said core manufacturing sectors such as automobiles, and labour-dependent sectors such as tourism and hospitality, have seen subdued growth post pandemic. This could be the reason for the poor employment scenario in the 12 states and UTs. Also, they may have witnessed a low-activity agriculture season in September, hitting rural jobs.

While it’s the northern states mostly that have performed poorly on the employment score in September, Puducherry witness a 3 percentage points rise in joblessness vis-à-vis August. In Kerala and Tamil Nadu, the increases in joblessness were more muted, said the Mint report.

Cheer amid gloom

Among the states with the highest joblessness rates were Haryana (20.3%) and Rajasthan (17.9%). However, they may have had cause to cheer in that these figures, in fact, represented improvements over August levels.

The report noted that India has been witnessing a bleak jobs scenario for several years now, only worsened by the COVID outbreak. Post the lockdown of 2020, the national unemployment rate stood at over 20%, from where it has now decreased to below 7%. Yet, the report said, for a labour-intensive economy such as India, a 7% joblessness rate is rather worrisome.

Going forward, the fear of a third wave of COVID — or the actual onset of such an outbreak — could further dampen the jobs outlook. However, the festival season and the ensuing harvest period may provide a much-needed boost to the economy and, therefore, to employment rates.