India's unemployment rate witnessed a sharp decline to 6.57 per cent in January, the lowest since March 2021, as the country gradually recovers with easing of restrictions following a decline in Omicron cases, according to Centre for Monitoring Indian Economy (CMIE).

While unemployment in urban India stood at 8.16 per cent in January, in rural areas it was the lowest at 5.84 per cent, as per data by the independent think-tank. In December, the unemployment rate stood at 7.91 per cent, with urban at 9.30 per cent and rural at 7.28 per cent, it added. Telangana reported the lowest unemployment rate at 0.7 per cent in January, followed by Gujarat (1.2 per cent), Meghalaya (1.5 per cent) and Odisha (1.8 per cent). However, Haryana had the highest unemployment rate at 23.4 per cent, followed by Rajasthan at 18.9 per cent.

CMIE had estimated the number of unemployed in India as of December 2021 at 53 million, of which a huge proportion were women. CMIE MD and CEO Mahesh Vyas, in his analysis of the December data, said 35 million people were actively looking for work in December 2021, of which 23 per cent or 8 million were women.

An equally important challenge is to provide employment to the additional 17 million who were also not employed and were willing to work if work was available, although they were not actively looking for employment, Vyas added.