NEW DELHI: India’s unemployment rate rose to 8.30% in December, the highest in 16 months, from 8.00% in the previous month, data from the Centre for Monitoring Indian Economy (CMIE) showed on Sunday.

The urban unemployment rate rose to 10.09% in December from 8.96% in the previous month, while the rural unemployment rate slipped to 7.44% from 7.55%, the data showed.

Mahesh Vyas, managing director of the CMIE, said the rise in the unemployment rate was “not as bad as it may seem,” as it came on top of a healthy increase in the labour participation rate, which shot up to 40.48% in December, the highest in 12 months.

“Most importantly, the employment rate has increased in December to 37.1%, which again is the highest since January 2022,” he told Reuters.

Containing high inflation and creating jobs for millions of young people entering the job market remain the biggest challenge for Prime Minister Narendra Modi’s administration ahead of national elections in 2024.

The main opposition Congress party launched a five-month long cross-country march in September from the southern city of Kanyakumari to Srinagar, in Indian Illegallly Occupied Jammu and Kashmir region, to mobilise public opinion on issues such as high prices, unemployment and what it says are the divisive politics of Modi’s Bharatiya Janata party.

“India needs to move from a single focus on GDP growth to growth with employment, skilling of youth and creating production capacities with export prospects,” Rahul Gandhi, senior leader of the Congress party, who is leading party’s 3,500 kilometre(2,175 mile) march on foot, told reporters on Saturday.

The unemployment rate had declined to 7.2% in the July-September quarter compared to 7.6% in the previous quarter, according to separate quarterly data compiled by state run National Statistical Office (NSO) and released in November.

In December, the unemployment rate rose to 37.4% in the northern state of Haryana, followed by 28.5% in Rajasthan and 20.8% in Delhi, CMIE data showed.