The unemployment rate has surged to a three-and-a-half-year high with the country passing through an unprecedented lockdown to fight the coronavirus pandemic. During the month of March, the unemployment rate rose by 90 basis points to touch 8.7%, according to the latest data.

In February, when Covid-19 started to spread across the world, the unemployment rate in India stood at 7.8% — a rise of 60 bps from January 2020, according to the latest data put out by the Centre for Monitoring Indian Economy (CMIE).

After the pandemic started gripping the world, resulting in far lower economic activity, unemployment in India has risen by an alarming 150 bps in just two months. Since 2016, when the CMIE started tracking the data, this is the first instance that the unemployment rate has shot up by 1.5 percentage points.

The last time the country witnessed such a huge unemployment rate was way back in August 2016, when it stood at 9.6%. The urban unemployment rate was at 9.35% during the month, while the rural unemployment rate stood a tad lower at 8.74%.

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Various states, which have seen a massive spike in unemployment rates, depend heavily on the tourism sector. The worst-hit are Odisha, Tamil Nadu, Uttarakhand and Goa. While Odisha has seen the rate surge to 13.1% from 3.1% in just a month, Uttarakhand's rate surged to 19.9% from 5.3%.

In the highly industrialised Tamil Nadu, unemployment has jumped to 6.3% from 2.1%. In Goa, it has gone up to 5.2% in March 2020 from 2.8% in February 2020.

"If you look at these numbers, most of these states are dependent on tourism. After the scare, they were the worst hit. In the case of Tamil Nadu, the slowdown in the auto sector is also contributing to layoffs," said Kris Lakshmikanth, CEO at Headhunters India.