Maharashtra Finance Report : Unemployment rate rose from 3.9 % to 6.2 % in August

Last updated Oct 9, 2020

Mumbai: The unemployment rate had increased from 3.9 % in July to 6.2 % in August as per the Maharashtra Finance Department Report. The reports stated, the sudden micro lockdowns have affected normal functioning of firms in the supply chain and also the small and medium enterprises. As a result, the demand for labour has declined.

The finance department report was presented in a meeting on Monday, to the Chief Minister Uddhav Thackeray and senior ministers to trace the unemployment and other related issues impacted due to coronavirus induced lockdown. The meeting discussed the report on the health of the state’s economy that Uddhav had sought ahead of firming up plans to roll more stimulus packages for businesses. Macroeconomic indicators, both at the national and the state level, were also evaluated.

According to the senior minister, there has been an uptick in the unemployment rate since August. Unemployment peaked to 20.9% in April but had since declined to 3.9% by July due to measures being taken to gradually reopen economic and public activities. However, it rose to 6.2 % by August end, which is a problematic issue.

The finance department report mentions- the latest uptick in unemployment was due to imposition of micro lockdowns in several parts of the state, the loss of work under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) and end of the kharif sowing season.

The unemployment rate had peaked at 20.9 % in April from 5.8 % in March. It subsequently improved to 15.5 %, 9.2 % and 3.9 % in May, June and July, respectively. In August, it rose to 6.2 %, the report stated.

According to sources, some ministers opposed the micro lockdowns as it is taking down on business heavily. The finance department pointed out that rising unemployment and job losses remain a major constraint in the revival of the state’s economy.

Maharashtra contributes approximately 14 % of India’s gross domestic product. The State GST collection has declined by almost Rs 18,420 crore in April-September as compared to the same period last year as per the report. The growth between April and September this time was down 33.5 % over this period last year.

The Centre over the issue of GST shortfalls, the state government has decided to indicate that if forced to opt from one of the two options put forward by the Union government to bridge the gap, it will pick the option of borrowing through a Reserve Bank of India (RBI) facilitated window.