The unemployment rate is a major indicator of the economic development in a country. It is a situation where an individual tries to find a job but is unable to get one. In February 2021, India’s Unemployment rate was 6.9 % which fell from 7.8 % in February 2020. However, it is slowing and gradually returning to normal.
The consequences of unemployment are far-reaching as it adversely affects the economic growth and the Gross Domestic Product (GDP) of a country which indicates a severe economic downturn. The only solution to this problem, in the long run, is to create an adequate number of jobs for the workless force of society.
Covid 19 pandemic has severely raised the unemployment rate in the country. According to the data available with the Centre for Monitoring Indian Economy (CMIE), urban unemployment dropped to 9.7% in the week ended June 13th against a monthly unemployment rate of 14.7% in May. India had a national unemployment rate of almost 12% in May, according to CMIE. Earlier the national unemployment rate had reached a record high of 23.52% in April 2020 during the national lockdown. However, it improved to 6.52% in Jan 2021.
For the week ended July 4th, the unemployment rate in both the rural and urban areas declined to 6.71% and 8.57% respectively from 8.98% and 8.6% over the previous week.
In recent times the highest unemployment rate recorded in rural areas was at 14.34% on weekend May 14th and 17.88% on May 30th in urban areas.
Unemployment is a very serious issue not only in India but the whole world. Covid gave a further push to worsen the situation. The unemployment rate increased in almost all the countries. Soon after the lockdown was announced last March during the first wave of the Covid pandemic, lakhs of migrant workers were left jobless.
Thousands of migrant workers returned to their native places as they were thrown out of their jobs. These workers were mostly from rural areas and financially weaker sections of the society. Though the regular or permanent workers faced fewer problems during the second wave temporary formal workers had to contend with job losses.
Losing their jobs had threatened their livelihood and survival. Not only the rural population were affected drastically by the pandemic but the urban population was also hit severely in every financial aspect. Many people working mostly in the private sectors lost their jobs during the pandemic and many were paid very less even if they were not jobless.
Financial constraints due to the huge rate of unemployment and inappropriate financial activity in the economy had left both sectors shaken. The devastating impact of the virus and the nationwide lockdown had mostly been on the economically backward classes.
However, the government launched various programs and campaigns to help sustain their livelihoods. Under the Pradhan Mantri Garib Kalyan Yojana financial support was provided which included the women, construction workers, farmers, and senior citizens. It was also assured that small business firms will also be supported during the covid crisis.