New schemes lead to drop in unemployment rate in rural India

New job opportunities offered by the Indian government to migrant laborers who had returned home during COVID-19 lockdown under various schemes have resulted in much-needed boost to employment in rural areas, a new data released by the Center for Monitoring Indian Economy (CMIE) showed.

Opening up of the country's rural economy, good progress of the ongoing monsoon season, and a robust sowing season are aiding the employment pick-up in rural India.

Promising monsoon is providing seasonal farm jobs to hundreds of thousands of migrant workers who returned to their rural homes.

Due to the nationwide lockdown which was imposed on March 25, hundreds of thousands of jobless laborers had migrated to their native places. Many of them walked down long distances, up to 2,000 km, as all public transport, including train, buses, and airlines, were suspended during the lockdown.

Many of the laborers hailed from states like Bihar, Jharkhand, Uttar Pradesh, Madhya Pradesh, Rajasthan and Odisha. They migrated from big cities like Delhi, Mumbai, Hyderabad, Chennai and Bengaluru.

Following the exodus, the federal government had promised jobs to such migrant workers right at their doorsteps, under various schemes like Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA), Skill India, Jan Dhan Yojana (Public Money Scheme), Kisan Kalyan Yojana (Farmers Welfare Scheme), Food Security Scheme, and Prime Minister Awas Yojana (Prime Minister Housing Scheme).

According to the CMIE data, the rural unemployment rate fell to 7.26 percent in the week ended June 21, from 10.96 percent in the previous week. The job loss rate has dropped to the lowest level in three months, even lower than the week preceding March 25.

The exodus of migrant workers from cities had raised fears of rampant joblessness in rural areas. But those fears have proved to be exaggerated as the timing of their return coincided with the summer crop planting season, opening up seasonal job avenues, reported the Hindustan Times.

It quoted economist Aroop Mitra as saying, "A good sowing season is helping the rural employment environment. There is distressed employment in rural areas. Hence, the labor force participation is going up."

Additional spending by the central government and states in schemes such as the employment guarantee scheme and the new jobs schemes to offer informal work to migrants have also helped, Mitra added.

While the employment rate in rural areas had seen a steady pick-up since the government eased lockdown curbs, urban India continues to witness higher joblessness as cities struggle to contain rising COVID-19 infections, revealed the CMIE data.

The urban unemployment rate continued to hover much above the 10 percent level, partly because of the impact of rising infections in cities such as Delhi, Chennai and Mumbai, and as companies resorted to retrenchment as cost saving measures. The urban job loss rate fell 2 percentage points to 11.19 percent in the week ended June 21, added the data.

According to the data, the country's overall unemployment rate was, however, lower at 8.48 percent in the week ended June 21, a drop of more than 3 percentage points from the previous week. In the pre-lockdown week, India's overall job loss rate was 8.41 percent, it added. 

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