Karnataka fast emerging out of unemployment post-unlock as joblessness rate drops

Karnataka is emerging out of the unemployment crisis faster than the rest of the country.

After the lockdown in August 2020, the unemployment rate in the state — which is dependent on knowledge-intensive and white-collar workforce — touched a low of 0.5% while it was 2.4% in September, according to data from the Centre for Monitoring Indian Economy (CMIE).

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In September, Maharashtra recorded an unemployment rate of 4.55%, Gujarat 3.4% and Tamil Nadu 5%.

Karnataka’s unemployment rate is almost a third of the national rate (6.7%).

Two other states that have lower rates than Karnataka are Assam (1.2%) and Chhattisgarh (2%). The unemployment rate is the percent of the labour force that is jobless — the proportion of people who aren’t able to find a job despite an active search, as part of the total pool of available workforce.

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At the peak of the lockdown in April, the joblessness rate in Karnataka was 29.8% while the national average stood at 23.5%.

However, as digital and IT services sectors picked up pace quicker than the manufacturing sector, the state saw a boost with a steep drop in the unemployment rate.

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"The primary difference is between knowledge and white-collar and non-white-collar workers. While knowledge workers are fully working from anywhere and are getting more opportunities due to expanded IT projects, it's the traditional sectors that are showing slower recovery," said, Lohit Bhatia, President Workforce Management, Quess Corp.

However, some other experts also warn that the actual unemployment numbers might be way higher than the reported numbers, as reverse migration during the lockdown has led to a reduction in the labour participation rate (LRP) -- or simply put the total available pool of workers in a geographic area.