(Bloomberg) -- India’s employment fell the most in a non-lockdown period, in June, likely as patchy monsoon rains delayed deployment of agriculture labor in rural areas.
Data released by Centre for Monitoring Indian Economy Pvt. showed that the unemployment rate climbed to 7.8% of the total workforce in June, from 7.12% in May. The fall was entirely led by rise in rural unemployment that increased to 8.03% from 6.62% in May, while urban unemployment shrank to 7.30% in June from 8.21% a month ago.
Overall, employment fell by 13 million to 390 million in June, against a gain of 8 million jobs in April and May, according to CMIE data. While around 13 million lost jobs during the month, the count of the unemployed increased by only 3 million as the rest exited the labor market, wrote Mahesh Vyas, managing director at CMIE, in an article published on Business Standard newspaper Tuesday.
This shrinkage, brought down labor force participation rate to its lowest of 38.8%, against 40% in the preceding two months. While this sharp fall in employment and an equally sharp deterioration in the principal labor market ratios are alarming, the worsening of labor market is not widespread across the country, Vyas wrote.
Rains were recorded being 32% below normal, which could have “slowed the deployment of labor into the fields,” he said, adding that labor participation may improve as monsoon picks up pace in the coming weeks.
The agriculture sector shed nearly 8 million jobs in June, mostly connected to plantations. However, crop cultivation added 4 million jobs, which was lower than the same period in 2020 and 2021, according to Vyas.
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