India's unemployment rate fell to its pre-lockdown levels to 8.5 per cent in the week ended June 21, according to the data released by the Centre for Monitoring Indian Economy (CMIE), the country's job loss.
The rate of unemployment had gone up from 8.75% in March to 23.5% in April and May.
It had further peaked at 27.1% in the first week of May, owing to the millions of job losses after the nationwide lockdown that was imposed to curb the transmission of COVID-19.
"In the first three weeks of June the unemployment rate dropped dramatically to first, 17.5 then 11.6 per cent and now 8.5 per cent," said CMIE managing director and CEO Mahesh Vyas.
The CMIE survey also suggested that urban unemployment had fallen sharply as the lockdown norms were relaxed and economic activities started gathering pace but were still higher than pre-lockdown levels.
Notably, data for the second week of June suggested an 11.2% unemployment rate in urban India which was substantially lower than the average of 25.83% during the corresponding period in April and May.
The survey also revealed that rural employment is emerging to lead the road to India's economic recovery. Rural India is witnessing an increase in jobs and may see "bigger gains" in the months to follow.
"The unemployment rate dropped to 7.26 per cent in rural India in the week ended June 21. This is lower than it was in the pre-lockdown week ended March 22 when the rate was 8.3 per cent. It is lower than the average unemployment rate in February and March 2020 which was 7.34 per cent and 8.4 per cent, respectively," CMIE's Vyas said.
Relaxation of lockdown, rural job guarantee programme and an increase in Kharif sowing this year are credited to be the reasons behind the dropping unemployment stress in rural India.
CMIE said that the sudden increase in Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA) activities have led to a sharp increase in rural employment besides easing of restrictions.
"Aggressive use of the MGNREGA scheme by the government, timely rains and enhanced sowing activities seem to have helped engage rural India and bring the unemployment rate down," Vyas said.