New Delhi: The last few months have seen a surge of interest around India’s unemployment data – fuelled in part by the government’s insistence on keeping the numbers under wraps. The leaked periodic labour force survey report carried out by the National Sample Survey Organisation revealed that in 2017-18, India’s unemployment rate had reached a 45-year high of 6.1%.
A new report – released on Tuesday by researchers at Azim Premji University, Bangalore – provides further damning numbers on the country’s employment scenario. Between 2016 and 2018, according to the State of Working India 2019 report, as many as five million Indian men lost their jobs. In addition, the report notes that women are worse affected by the employment scenario than men.
Given that the government has not released PLFS data and the Labour Bureau’s employment-unemployment survey has also been discontinued, the authors rely on the Consumer Pyramids Survey of the Centre for Monitoring the Indian Economy (CMIE-CPDX) for their work.
The beginning of the job losses, the report notes, coincided with Prime Minister Narendra Modi’s demonetisation announcement. CMIE has said in the past too that its data show that demonetisation had a large-scale impact on India’s job market. The authors argue, though, that “no direct causal relationship [between demonetisation and job loss] can be established based only on these trends”.
“…the labour force participation started to decline suddenly from the third wave of 2016 (September to December 2016) for both urban and rural men. The rate of decline slowed down by the second wave of 2017, but the general trend has continued and there has been no recovery.”
The State of Working India report says that not only is the unemployment rate among educated workers rising, even less educated and skilled workers have been facing job losses and less opportunities since 2016.
The declining labour force participation rate and workforce participation rate (the latter refers to the number of people who are actually working, while the former also includes those who want to work but are not employed) is the opposite of what one would expect, given India’s young population.
According to the researchers, disaggregating the data by educational levels indicates that the decreasing rates are influenced largely by less educated workers. Given that, the authors argue:
“…much of the current debate over jobs has focused on unemployment among the higher educated. While this is indeed a problem, we must also be aware of the fact that the last two years have not been good for the less educated sections of the labour force as well. And in absolute terms, this is a much larger number of people in the more vulnerable sections of society.”
While things have definitely taken a turn for the worse in the last two years, the authors argue that India’s employment picture wasn’t too pretty to begin with. Since 1999-2000, the unemployment rate has only been rising, both overall and for the educated.
The charts above make it clear that the unemployment scenario has been worsening, and also that women are worst affected. This, the report notes, “clearly demonstrate why unemployment has emerged as the primary economic issue in the general election of 2019”.
Note: Charts created on the basis of data provided in the SWI.