New Delhi [India], July 21 (ANI): Commenting on the rural unemployment rate released by the Centre of Monitoring Indian Economy (CMIE), which has increased to 7.1 per cent in the week ended on July 19 from 6.34 per cent recorded in the previous week, economists believe that reverse migration has resulted in unemployment in rural India.
While the overall national unemployment inched up to 7.94 per cent from 7.44 per cent recorded in the previous week, the urban unemployment rate dropped marginally to 9.78 per cent from 9.92 per cent during the same time period, CMIE data showed.
Economists and experts believe that the labour market will see a tougher challenge over the next couple of months both in the rural areas and urban pockets. In rural India, the sowing season is nearing an end, monsoon will pick up in parts of India and natural calamities like floods will restrict activities both in the agriculture sector and partially limit low-end self-employment avenues. In urban areas, which is even seeking patches of lockdown due to COVID-19, the slow recovery of businesses, will limit a faster recovery that the country saw in the month of June.
Agriculture Economist Devinder Sharma said that unemployment has moved upward due to the reverse migration of labours from cities to rural areas and the data is not surprising.
"The pandemic has shown that time has come to make the villages powerhouse of growth. When everything was standstill due to lockdown, agriculture was the only sector which has shown growth," Sharma said.
"I always say that agriculture is a refugee in its own country. Farmers don't get the fair price of their crops and now the time has proved that our agriculture policies were wrong. There are no jobs in urban areas. Corporate (sector) has got a tax concession of 6 per cent by the Central government but there was a mere investment of 0.4 per cent of the GDP for 50 per cent population of our country who are farmers. So now the time has come to make our rural areas powerhouse of growth," added Sharma.
Sharma demanded that the Central government should increase the Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA) 100 days job guarantee for workers to 200 days and per day wage of Rs 202 should also be increased.
Meanwhile, Arup Mitra, a professor of economics at the Institute of Economic Growth in New Delhi, said, "Cultivation of Kharif season is over and now that the rain has started and they do not get employment immediately, this resulted to increase in rural unemployment. The rural non-farm sector is not very vibrant sector, of course, you have some National Rural Employment Guarantee Act (NREGA) programme but other than that what do we have in the rural non-farm sector?"
He further added that many of these activities are the residual type like people open their small shops, vegetable vendors, tea shops but that is not gainful employment. Naturally, people, who went back to rural areas if they don't get anything substantial there will be a rise in the unemployment rate.
Commenting on the way forward, Mitra said that people will not come back to urban areas immediately. Some of the migrants are slowly coming back but the large number who have gone back to the rural areas is in a complete fix.
The rural non-farm sector strategy will have to be adopted with all seriousness and with immediate action. In what way they will engage in the rural economy is an important question. They (rural workers) cannot afford to rely on the agriculture sector because it does not need so many people anymore. It is the rural non-farm sector that has to emerge as a vibrant economy. (ANI)