02/01/2019, 18.27
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India’s unemployment rate reaches highest level in 45 years

About 11 million people or 6.1 per cent of the workforce are unemployed. In 2011-2012 it was 2.2 per cent. Some 12 million young people enter the workforce each year. The data come at a critical time in India’s political life as parties get ready for an upcoming election.

New Delhi (AsiaNews/Agencies) – Unemployment has reached record levels in India, 6.1 per cent of the workforce, or about 11 million people, the highest level since the early 1970s, this according to an assessment by the National Sample Survey Office (NSSO) leaked to the Business Standard newspaper. In 2011-2012, the rate was 2.2 per cent.

The numbers come at a very delicate time in Indian politics, ahead of what might be the roughest election in Indian history next May.

Many political parties have criticised Prime Minister Narendra Modi for failing to release the information, ostensibly for fear of jeopardising his re-election chances.

The unemployment data are now available and give a less than encouraging picture of the Indian economy, after years of rapid growth.

This week, two top government bureaucrats also resigned over the non-publication of unemployment data, raising more than one eyebrow. One of them is P.C. Mohanan, head of the government-funded National Statistical Commission.

The government said that it had delayed publication because the data were incomplete since they did include the informal economy.

For his part, Mohanan noted that the official survey was a standalone report and it did not require any additional verification.

Two recent measures undertaken by the Modi government have had a negative impact on the employment picture. The first was ‘demonetisation’, i.e. the removal from circulation of 500- and 1,000-rupee notes, and the introduction of a ‘Goods and Services Tax‘.

Faced with criticism from opposition parties who slammed demonetisation as a "disaster", Prime Minister Modi responded by saying that there were no good studies in this regard.

However, the assessment by the NSSO, conducted between July 2017 and June 2018, shows an unemployment rate of 6.1 per cent, the highest since 1972-73, the period for which the data are comparable.

In a country of more than 1.2 billion people, those under 35 represent 65 per cent of the population.

A large labour pool has always been a strong point for the country where about 12 million young people enter the job market each year. As they start to work and earn, they can spend on goods and services, accelerating growth.

This is what spurred India’s economic growth in the past few years. But now, according to the assessment, something isn’t working. The labour force participation rate has dropped from 39.5 per cent in 2011-2012 to 36.9 per cent in 2017-2018.

This means that fewer people are looking for a job or that companies are unable to absorb the supply of workers.

In terms of geographic distribution, the assessment shows that unemployment is particularly high among people between 15 and 29 years – in urban India, 18.7 per cent of men and 27.2 per cent of women in this age group are looking for work, whilst in rural India, it is 17.4 per cent and 13.6 per cent respectively.

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