The entire world is struggling to deal with employment issues, particularly in the technology sector. India is no exception given that it is the second-largest country in terms of population. According to the latest data from CMIE, both the employment and unemployment rate in India increased in December 2022. The country’s estimated unemployment rate rose from 7.9% in December 2021 to 8.3% in December 2022. This is the 30-day moving average figure. The number of unemployed people rose 6.3% YoY, from 34.9 million to 37.1 million during the period.
On the other hand, India’s employment slightly increased 1.04% YoY between December 2021 and December 2022. The total number of employed people in India increased from 406 million to 410.2 million during the same period.
It is important to note that the number of employed and unemployed people in India peaked in the month of December 2022, compared to the privious 11 months.
Let’s take a closer and deeper look at India’s current job market.
Unemployment rate in India in 2022
December had been the worst month for Indian job seekers. The weekly data of the unemployment rate during December 2022 indicated an expected rising trend. Surprisingly, the unemployment rate exceeded 8% in all four weeks of December 2022, averaging 8.8%. However, the final estimate of 8.3% unemployment rate, on a 30-day moving average basis, was thus a pleasant surprise in comparison to expectations of a much higher increase.
When compared to the last four months of 2022, the employment prospects don’t look promising either. In September, there were 27.8 million people who were actively looking for employment. This figure increased to 33.4 million in October, 35 million in November and 37.1 million in December. As a result, the unemployment rate rose from 6.4 per cent in September 2022 to 8.3 per cent in December.
Total Employment In India 2022
By the end of December 2022, the country have had over 410 million employed people – the highest number since the pre-pandemic month of January 2020. In January 2020, India’s total employment was 410.5 million.
However, the month-over-month and year-over-year growth in India’s employment doesn’t seem impressive. The country recorded only 2.02% MoM and 1.04% YoY increase in the number of employed people in December 2022.
The CMIE data also reveals that the percentage of the working-age population in India increased from 36% in October 2022, to 36.4% in November and to 37.1% in December. This more than 1% improvement in the employment of working-age population during December month is a positive sign, as it almost offsets the increase in the unemployment rate.
India’s labour participation rate (LPR) peaked in December 2022 at 40.5% in comparison to all other months of the year. The LPR has risen significantly 150 basis points when compared to the previous two months. This translates to a 17.6 million increase in the labour force, 10.6 million of which were added in December alone.
Of the 10.6 million people who joined the labour force in December, 8.4 million found employment, while the remaining 2.2 million became unemployed. In November, of the 7 million who joined the labour force, 5.5 million found employment, while the remaining 1.5 million were added to the ranks of the unemployed.
As employment opportunities have increased in rural India during recent months, a sizable portion of the unemployed working-age population has been drawn into the labour force. This could be an explanation for the striking rise in the labour force participation rate (40.5% in December 2022).
Employment and unemployment in Rural and Urban India
CMIE data for December 2022 depicts that rural India saw a significant rise in the number of employed people, whereas urban India saw a sudden spike in the unemployment rate. This encapsulates the regional disparity in labour markets.
The number of employed people in the rural and urban regions peaked in December compared to all previous months of the year. As of December 2022, rural India had approximately 280 million employed people, representing a 68.2% of the total employment in India. On the other hand, urban India had approximately 130.3 million employed people by the end of 2022, representing a 31.8% of the total employment in India.
The estimated unemployment rate recorded in rural India and urban India stood at 7.4% and 10.1%, respectively, in the month of December 2022.
December 2022 recorded the highest unemployment rate in urban India in the last five years, showing a worrying sign for all job seekers.
