Distressing levels of unemployment in India even at onset of festival season

The urban unemployment rate reached 9.57 per cent in August 2022 and fell to 7.7 per cent in September, indicating increased market activities, but not enough to arrest the decline in the job market

Representative (DW Photo)
Representative (DW Photo)

Dr Gyan Pathak

The onset of the festival season in September, which culminates with the celebration of Deepawali on October 24, could not generate enough employment, which saw an unemployment rate of 7.7 per cent in urban India, indicating weak revival of the job market in the country.

This figure was above the 7.37 per cent recorded in October 2021, when COVID was still a significant threat.

As per the latest CMIE data, urban unemployment rate reached a one year high in August 2022 at 9.57 per cent, and fell to 7.7 per cent in September, indicating increased market activities, but not enough to arrest the decline in the job market.

The rural unemployment rate in September declined from 7.68 per in August to 5.84 per cent in September, which indicates a rise in agricultural activities more than the increased market activities as the urban unemployment rate shows.

The all-India unemployment rate came down to 6.43 per cent in September from 8.28 per cent in August, only a little improvement from 6.56 per cent recorded in January 2022.

The one year data since October 2021 shows that the unemployment in India witnessed sharp rise and fall, which indicates that the Indian labour market continues to be volatile. The all India unemployment rate moved in the range of 6.43 to 8.28 per cent. It indicates that people got employment in a month only to lose it in the next.

It is also true for both urban and rural areas. The unemployment rate fluctuated in urban India between 7.32 per cent and 9.57 per cent in the last year while it hovered in the range of 6.41 per cent to 8.3 per cent in rural India.

The thirty days moving average of the unemployment rate in the states and Union Territories witnessed a sharp variation in September, from the lowest 0.1 per cent in Chandigarh to highest 23.8 per cent in Rajasthan.

The worst unemployment rates in double digits were registered in 7 states of the countries – Rajasthan (highest at 23.8 per cent) followed by Jammu and Kashmir (23.2 per cent), Haryana (22.9 per cent), Tripura (17 per cent), Jharkhand (12.2 per cent), Bihar (11.4 per cent), and Goa (10.9 per cent).

The states and UTs having the unemployment rate more than the national average were Delhi (9.6 per cent), Himachal Pradesh (9.2 per cent), Telangana (8.3 per cent), Puducherry (7.3 per cent), and Punjab (7 per cent). Kerala had an unemployment rate of 6.4 per cent, almost at the level of the national average.

A total of 13 states and UTs – Andhra Pradesh, Assam, Chandigarh, Gujarat, Karnataka, Madhya Pradesh, Maharashtra, Meghalaya, Odisha, Tamil Nadu, Uttar Pradesh, Uttarakhand and West Bengal – had an unemployment rate of less than the national average.

Such wide regional differences in the unemployment rates indicate lopsided implementation of the government policies relating to development and strengthening of the labour market.

This data on unemployment does not augur well when we read it with another data of high GDP growth rate at 13.5 per cent in the first quarter of FY 22-23 compared to a year ago helped by the base effect, thereby registering the fastest growth in four quarters.

It was a clear case of our economic recovery moving fast but which ditched our workforce by not providing them a proportionate number of jobs at the level of GDP growth rate. It’s a jobless growth, the repercussion of which in now being felt in the society in terms of social unrests and even suicides.

The data for National Crime Records Bureau for the year 2021 has confirmed that suicides by daily wage worker reached an all-time high. The NCRB data even reveals that among the suicides of workers, suicides by self-employed also reached an all-time high.

The rise in the level of self-employment is also a matter of serious concern, since people tend to call themselves self-employed only to conceal their unemployment. In a majority of the cases, self-employment is unemployment in disguise.

The improvement in urban unemployment during the festival season shows that people resorted to temporary self-employment as vendors in large numbers in September, which they cannot sustain beyond the Deepawali festival. The rural areas may sustain the level of employment in coming months due to increased agricultural activities, but that too is temporary.

All these indicate that the volatility in labour market is set to continue, unless India adopts a policy of economic recovery and growth that puts the workforce at its centre. They badly need social security coverage, since their real wages have been reduced to a pittance due to the unabating price rise and inflation.

(IPA Service)

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