The unemployment rate in urban areas has shrunk for the fourth consecutive quarter ending at 7.6 per cent in the June quarter of 2022, as against 14.3 per cent in the June quarter of the previous year, the monthly economic review by the finance ministry said on Saturday. Consequently, the net payroll additions doubled in June 2022 quarter compared to the corresponding period last year with broad-based enhancement across the industry, it said, citing EPFO data.
“The unemployment rate is now below pre-pandemic levels as measures taken earlier and later during the pandemic period, to raise employment levels, are coming to fruition,” said the finance ministry in its economic review for August.
Work Demand Under MGNREGS Lowest in August
Work demanded under MGNREGS has been diminishing since May and was at its lowest in August 2022 as compared to the same period in the last two years, signalling a possible reduction in the unemployment rate in rural areas. “This fall can be attributed to a pick-up in agricultural and non agricultural activities coupled with the end of reverse migration resulting from increased employment opportunities in industrial/ urban areas,” it added.
Growth Momentum of Q1 Sustained in Q2
The growth momentum of Q1 has been sustained in Q2 of 2022-23 as indicated in the robust performance of high-frequency indicators (HFIs) during July and August this year, the review indicated. Meanwhile, PMI manufacturing remained in the expansionary zone at 56.2 in August 2022, the second highest since November 2021, supported by the growth of output and new orders and a fall in input cost inflation.
“The economy is poised to grow at a rate of 7.2 per cent in 2022-23, buoyed by a positive outlook on consumption, investment and employment. The growth outlook is however weak for trade and output for the world output in general, and advanced economies in particular,” said the ministry.
India 5th Largest Recipient of FDIs in Q1 2022
The monthly economic review also stated that India was the fifth largest recipient of foreign direct investment (FDI) among the defined set of developed and developing economies. The ministry attributed this to India’s buoyant growth outlook coupled with steady improvement in ease of doing business and supportive government policies, which made the country an attractive business destination.
“The momentum has sustained in Q2 2022 as well with FDI inflows of $16.1 billion. India’s exports grew at the second highest rate in this quarter despite the ongoing global slowdown, indicative of strong demand for Indian goods,” said the finance ministry.
“India’s strong forex reserves, which are third largest as compared to other economies are boosted by capital inflows during the two pandemic years and are adequate to cover imports equivalent to nine months as of July 2022, which is higher than most of the other economies,” it added.