(Bloomberg) -- India's unemployment rose to a one-year high in August, as the economy's world-beating growth failed to translate into increased employment opportunities, according to a private research firm.
Jobless rate increased to 8.28% last month, data from the Centre for Monitoring Indian Economy Pvt. showed Thursday. That's the highest since August 2021 and compares with a 6.8% reading in July. The sharp jump was because of rural unemployment rising to 7.68% from 6.14% during the same period, and in urban areas to 9.57% from 8.2%.
“It's been a bad month,” CMIE Managing Director Mahesh Vyas said by phone. “Four million more people came to the market but we couldn't provide them jobs. Employment shrunk and the economy employed less people compared to July.”
India's gross domestic product grew 8.7% in the year ended March, making it the fastest-growing major economy. While an expected 7.2% expansion in the current financial year will help it keep the world-beating tag, that performance isn't seen as good enough to create jobs for a nation soon poised to overtake China as the most-populous one. Prime Minister Narendra Modi has announced a plan to fill one million vacancies in government departments by 2024, but data shows the state recruited just 0.3% of the candidates who applied in the last eight years.
Weaker recovery in the farm sector, which has been impacted by heat waves and uneven rains, is weighing on employment prospects. Data released Wednesday showed agriculture output rose 4.5% in three months to June -- the slowest pace among all the sectors.
“The situation is worsening in rural India,” Vyas said. “Rains have not been very good, rice cultivation has dropped.”
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