In December 2017, a total of 40.78 crore people were employed, while in the month of December 2018 the number fell to 39.69 crores. (Representational image)

In bad news for labour market in India, the estimated unemployment rate rose to a 27-month high of 7.38% in the month of December 2018 and the total number of people employed fell by about 1.09 crore, according to CMIE data. In December 2017, a total of 40.78 crore people were employed, while in the month of December 2018 the number fell to 39.69 crores, the Centre for Monitoring Indian Economy (CMIE) data showed.

The unemployment rate in December 2018 rose to 7.38% from 6.62% in November 2018 and 4.78% in December 2017, highest since September 2016 when it stood at a high of 8.46%. Alongside the increase in the unemployment rate, there has also been a decline in the labour participation rate (LPR), the data noted. Of the total 1.09 crore jobs in the last 12-month period, about 83% or 91.4 lakh jobs were lost in rural areas.

CMIE database on “Unemployment Rate in India” is based on the panel size of over 1,58,000 households in the country.

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In December 2017, a total of 26.94 crore people were employed in rural parts of the country, which dropped to 26.03 crores in the month of December 2018. Remaining about 18 lakh were lost in urban parts of the country with the overall numbers of employed declining to 13.66 crores from 13.84 crores.

According to CMIE data, there has been a decline in the estimated LPR— the proportion of working-age people who are willing to work and are either actually working or are actively looking for work, in line with a fall in the unemployment rate.

Meanwhile, the estimated labour participation rate also dropped from 43.57 in December 2017 to 42.47 in December 2018. The rate was at 45.15 in December 2016 and at 47.84 in September 2017, the data showed. While the pace of job losses only gained momentum in rural areas in the year gone by, the urban parts too saw jobs losses.