India's unemployment rate in April rose to 7.6 percent, the highest since October 2016, and up from 6.71 percent in March, according to data compiled by the Centre for Monitoring Indian Economy (CMIE) released late on Wednesday.

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"The lower unemployment rate in March was a blip, and it has again climbed following the trend of earlier months," Mahesh Vyas, head of the Mumbai-based CMIE think-tank, told Reuters.

The figures could be a setback for Prime Minister Narendra Modi during a staggered general election that will end on May 19, with opposition parties criticising the government over weak farm prices and low jobs growth.

Factory activity expanded at its slowest pace in eight months in April as growth in new orders and output dipped as the general election got under way, a separate private business survey found.

Optimism among manufacturing firms also ebbed in April as they remain concerned about what policies a new government will adopt when it takes office by the end of May.

The government recently withheld jobs data because officials said they needed to check its veracity.

India usually only releases official unemployment data every five years.

But December unemployment figures were leaked to a newspaper and showed that the jobless rate rose to its highest level in at least 45 years in 2017/18.

The government has said it will release jobs data once a year.

The CMIE said in a report released in January that nearly 11 million people lost their jobs in 2018 after the demonetisation of high-value banknotes in late 2016, and the chaotic launch of a new goods and services tax in 2017, hit millions of small businesses.

The government told parliament this year that it did not have data on the impact of demonetisation on jobs in small businesses.

First Published:May 2, 2019 7:18 PM IST