Unemployment at 45-year high; official report confirms leaked data before polls

The  official employment data released today by the National Sample Survey Office (NSSO) confirms the worst fears! India is at a 45-year-historical high of 6.1 per cent in unemployment. This unemployment rate was projected in a pre-election leaked report which was later denied by the government.

The newly formed government, on their first day at office on May 31, announced that joblessness in the country was 6.1 per cent of total labour force during 2017-18. The rates were 6.2 per cent for males and 5.7 per cent for females across India. In urban areas, the figure was 7.8 per cent – 7.1 per cent and 10.8 per cent for males and females. In rural areas, the unemployment rate was 5.3 per cent– 5.8 per cent and 3.8 per cent for males and females.

The NSSO unemployment rates were among the lowest in 2009-10 and 2010-12. For instance, for urban males, it was 2.8 per cent and 3.0 per cent, respectively for those years. This would mean a rapid increase in unemployment rates in the last five to six years.

The NSSO unemployment rates were among the lowest in 2009-10 and 2010-12. For instance, for urban males, it was 2.8 per cent and 3.0 per cent, respectively for those years. This would mean a rapid increase in unemployment rates in the last five to six years.

Many economists have pointed to the reports of job losses during demonetization as contributing factors to the overall increase in unemployment rates. Data from a private agency reported job losses of 1.4 million in the first four months of 2017-18.

The former head of the National Statistical Commission and another member of the NSC had resigned after the data leaked earlier this year. This set off speculations that the report could have been suppressed for political reasons since such a report is likely to put the dispensation in an embarrassing position ahead of the elections.

The NSSO PLFS survey confirms that the 2017-18 unemployment rate was higher than recorded in nine earlier surveys, but the Chief Statistician Pravin Srivastava  however, emphasised that the latest labour survey cannot be compared with previous ones. PTI has reported that he does not want to “claim a 45-year low or high” as it is a different matrix and warned about the change in the current methodology and risk of it being wrongly interpreted.

Those willing to work has fallen too

The report provides comprehensive data on unemployment, nature of employment and demographics of the workforce over a period of time and across regions. What adds to the unemployment data is the steep fall in labour force participation rates (LPFR) despite the steep growth in working age population. This counts those willing to work including those already working.

The LPFR has dipped from 43 per cent to 36.9 per cent since 2004-05. The decreases are sharper among the 15-29 age group. A major contribution to this dip is the fall in LPFR rates in rural women category where it has decreased from 33.3 per cent to 18.2 per cent.

The LPFR has dipped from 43 per cent to 36.9 per cent since 2004-05. The decreases are sharper among the 15-29 age group.

A worrying factor for long-term policy making is that while those in the 15 to 29 years constitute a significant size of the population, the size of the 0 to 15 has shrunk, indicating that if India were to take advantage of a youthful population it should put them to productive use now. Many experts aver that the fall in LPFR indicates a lack of prospects for getting a job rather than people keeping away voluntarily since their needs are being taken care of.