Unemployment rate fell to a four-month low of 7.12% in May, reflecting a pick-up in contact-intensive service industries and increased hiring in a range of sectors.
Both urban and rural areas contributed to the decline in the joblessness rate during the month, Centre for Monitoring Indian Economy (CMIE) data showed.
In recent times, the overall unemployment rate was the highest at 11.84% in May 2021. During the month in which the pandemic was wreaking havoc, unemployment rate in both urban and rural areas were in double digits at 14.72% and 10.55%, respectively.
As the Covid-induced lockdown and restrictions on movement eased, unemployment rate started softening.
However, the pace of decline was not steady.
Following softening of the overall unemployment rate to 6.56% in January this year, unemployment rate went up to 8.11% in February only to fall to 7.57% in March. It again went up slightly to 7.83% in April.
In May, urban joblessness rate was at 8.21%, down from 9.22% in April and 8.28% in March.
However, it was higher than 7.57% in February and 8.14% in January.
Urban jobs arguably provide better wages and have a greater share of what are called the organised sectors. Their decline implies a decline in the overall quality of jobs in India.
Rural joblessness rate, on the other hand, fell steadily since February.
From 8.37% in February, it fell to 7.24% in March and 7.18% in April and further to 6.62% in May.
Rachit Mathur, founder & CEO, Avenue growth, an on-demand work platform, said return of normalcy in working environment and aggressive hiring in sectors like information technology, telecom, healthcare, infrastructure and retail are pushing the unemployment rate down in the country.