India’s unemployment rate rises to 5.6% in May as farm jobs decline post-harvest

NEW DELHI: India’s unemployment rate rose to 5.6% in May from 5.1% in April, partly due to a drop in farm activity after the end of the harvest season, the statistics ministry said on Monday.

This was the second monthly release of India’s labour force data covering both urban and rural areas. Previously, the government published employment data on a quarterly basis for urban regions and annually for both urban and rural areas.

Asia’s third largest economy, which expanded 7.4% year-on-year in the January-March quarter, is expected to grow 6.5% in the current fiscal year beginning April - broadly in line with the previous year’s pace.

The female unemployment rate stood slightly higher at 5.8% in May, compared to 5.6% for males, the data showed.

Unemployment rate among urban youth aged 15 to 29 years rose to 17.9% in May from 17.2% in April, while in rural areas, the youth jobless rate increased to 13.7% from 12.3% over the same period.

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In rural regions, employment shifted away from agriculture to manufacturing and services as the share of workers in the farm sector fell to 43.5% in May from 45.9% in April, largely due to a post-harvest decline in agricultural activity.

The decline in farm activity also impacted work opportunities for women in rural areas, with the labour force participation rate among women falling to 27.8% in May from 28.8% in April, the data showed.

India’s manufacturing growth slowed to a three-month low in May as demand softened amid price pressures and geopolitical tensions, a survey showed earlier this month.