Thursday, 19 May, 2022
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India’s unemployment rate fell to 5.8% in 2018-19, experts say Covid shock will drive it up

Periodic Labour Force Survey shows unemployment rate in India remained elevated in 2018-19 despite the marginal fall compared to 6.1% in 2017-18.

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New Delhi: India’s unemployment rate fell marginally to 5.8 per cent in 2018-19 from 6.1 per cent in 2017-18, data released by the National Statistical Office showed.

Despite the dip, the numbers are still higher when compared to the 2.2 per cent unemployment rate recorded in 2011-12, the only employment survey conducted prior to the 2017-18 survey.

This reflects the enormous challenge facing the Narendra Modi government, which had promised more jobs for India’s youth in its election campaigns.

The Periodic Labour Force Survey (PLFS) conducted between July 2018 and June 2019, released on Thursday, showed that the unemployment rate remained elevated, possibly due to the spillover effects from the 2016 demonetisation and the slowdown in the economy.

The Indian economy slowed to 6.1 per cent in 2018-19 and further to 4.2 per cent in 2019-20 from 7.2 per cent in 2017-18.

Also read: RBI survey shows consumer confidence at record lows, Indians pessimistic about economy, jobs

Covid shock will see numbers go up

Statisticians pointed out that these numbers are likely to be substantially higher in the next survey conducted for the period, July 2019 to June 2020, when the effect of Covid-19 pandemic and the subsequent lockdown in April and May will be factored in.

The economic growth for 2020-21 is expected to contract by at least 5-12 per cent.

Data from the Centre for Monitoring Indian Economy showed that unemployment rates for the months of April and May was above 20 per cent, reflecting the job losses due to the lockdown and the subsequent return of labour to their villages.

P.C. Mohanan, former chairman of the National Statistics Commission, said the data indicated there isn’t much improvement in employment situation in the country.

“The previous report released was in 2011-12. Now, the reports are coming every year and the unemployment rate is unlikely to change much unless there are big shocks. Demonetisation was a shock and now the Covid-19 pandemic is a shock. The next survey’s unemployment numbers will reflect the pandemic shock,” he said.

The PLFS data also showed that the rural unemployment rate fell to 5 per cent in 2018-19 from 5.3 per cent. The urban unemployment rate fell marginally to 7.7 per cent from 7.8 per cent.

However, the labour force participation rate, or the percentage of people actively looking for jobs, improved for women both in urban and rural areas.

Also read: Unemployment in March highest since September 2016, CMIE data shows fallout of Covid-19


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