India’s Unemployment Rate Reaches Highest Level in 16 Months

January 2, 2023

According to data from the Centre for Monitoring Indian Economy (CMIE), India’s unemployment rate reached 8.30% in December, the highest level in 16 months. This marks an increase from the 8.00% recorded in November. The urban unemployment rate also saw a rise, going from 8.96% in November to 10.09% in December. However, the rural unemployment rate saw a slight decrease, going from 7.55% in November to 7.44% in December.

Haryana recorded the highest unemployment rate at 37.4%, while Odisha had the lowest at 0.9%. In addition to Haryana, seven other states saw double-digit unemployment rates, including the national capital.

Top 5 States with Highest Unemployment Rates in December:

Haryana: 37.4%
Rajasthan: 28.5%
Delhi: 20.8%
Bihar: 19.1%
Jharkhand: 18%

Top 5 States with Lowest Unemployment Rates in December:

Odisha: 0.9%
Gujarat: 2.3%
Karnataka: 2.5%
Meghalaya: 2.7%
Maharashtra: 3.1%

Despite the increase in unemployment, Mahesh Vyas, Managing Director of CMIE, noted that the rise in the unemployment rate was “not as bad as it may seem,” as it came alongside a significant increase in the labor participation rate, which reached 40.48% in December, the highest in 12 months. Vyas also pointed out that the employment rate had increased to 37.1% in December, the highest since January 2022.

According to data from the National Statistical Office (NSO), the unemployment rate had actually declined to 7.2% in the July-September quarter, compared to 7.6% in the same period the previous year.

While the unemployment rate in India reached a 16-month high in December, there are still some positive indicators in the labor market. The increase in the labor participation rate and the employment rate suggest that more people are actively seeking and finding work. It will be important to continue monitoring these trends in the coming months to see if the unemployment rate begins to improve.

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