The Centre for Monitoring Indian Economy said on Saturday that India’s unemployment rate rose to 8.48% of the labour force in October. The rate of unemployment was 7.2% in September. The change is attributed to a slowdown in the Indian economy. This is the highest rate of unemployment since August 2016, The Hindu reported.

While urban unemployment stood at 8.89% in October, the figure for rural unemployment was 8.28%.

The Indian economy grew at just 5% in the April-June quarter, the slowest in six years. Besides, India’s industrial output declined by 1.1% in August, the worst performance in over six years. Infrastructure production fell to 5.2% in September.

In May, the government had released a report by the National Sample Survey Organisation that showed that India’s unemployment rate rose to a 45-year high of 6.1% in 2017-’18.

Mahesh Vyas, the managing director and chief executive officer of the Centre for Monitoring Indian Economy, said the present unemployment rate is not comparable to rates before the demonetisation of high-value currency notes in November 2016, Business Standard reported. The 8.1% unemployment rate is graver than a same rate before the note ban, because of the shrinkage in the labour force.

“The high joblessness in the first half of 2016 was a different story altogether,” he said. “Many rural women and youth across the regions left the labour force itself after demonetisation, reducing the denominator that is used to calculate the unemployment rate.”

Urban unemployment rates have been higher by 1% to 2% as compared to rural rates. However, this difference fell to just 0.6% in October, Vyas said. “A rate of 8% in rural India is stressful, because there are not many fall-back options there, as in towns and cities,” Vyas said. “It would become a question of survival if the situation worsens further.”

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