Unemployment Rate of India

Truth had to come out :India's unemployment data casts shadow over its leader's re-election.

Note: The year in the graph, for instance, 1978 represents the period Jul'1977- Jun'1978. The quinquennial unemployment data has been obtained from previous rounds of NSS surveys, NSS-EUS 2011 and Business Standard's January 31st report. 

Recent Data Trend

It all began on Thrusday morning with the Business Standard publishing a leaked scoop about the country’s unemployment rate having reached a 45-year high of 6.1% in 2017-18. This was based from the National Sample Survey Office’s (NSSO) periodic labour force survey. The final results of the survey was expected to be released by December 2018, but instead it saw two of the Commissioners who were to release the report resigning in protest this week. Soon after, Chairman of Niti Aayog, a government research think tank, said the unemployment report was still in a draft form, and they were going to release it in March, 2019.

If the shocking revelation is true, Mr. Modi will face potential troublesome challenges on promises he made in 2014 to create jobs. The NSSO survey on employment and unemployment figures for 2017-18 showed the highest levels of joblessness since 1972-73, in the aftermath of the Modi government’s decision to demonetize high value notes.

Until this scoop came along, often sited data sources for employment and unemployment came from International Labour Organization, CMIE (a reputed Indian Private company), Payroll Survey. CMIE releases monthly and daily moving average unemployment data. CMIE surveys have pointed out 11 million jobs were lost from Dec’17-Dec’18. The Ministry of Statistics and Programme Implementation also brings out monthly estimates of new employees joining into schemes such as Employee Provident Fund.

Based on ILO’s World Employment and Social Outlook Trends report, the unemployment rate was expected to remain static at 3.5% for the period 2017-19. Although the report also put a high percentage of employed population into vulnerable employment for 2017-18. This raises serious question about how unemployment rates can vary by such large numbers.

The above chart projects the trend in overall level of unemployment rate starting from 1977-78 until 2011-12. The data has been extracted from NSSO reports. The rising unemployment rate to 6.1% level in 2017-18 is based from the revelations made by Business Standard, which is yet to be confirmed. There is certainly a structural reason behind the rising trend in unemployment level. A large urban workforce unable to get employment would naturally lead to such a trend.

The leaked report also points out to the crisis being particularly acute among the youth. The unemployment rate among urban men (aged between 15 to 29yrs) is 18.7%. Things only stand marginally better for the rural men where the unemployment rate stands at 17.4%. Unemployment rates among young women in both rural and urban India has also gotten worse. This shows the demographic dividend that India had earned with the largest working-age population has turned into a nightmare in over five years. 

We believe, the unemployment rate rising to around 6.1% in 2017-18 is certainly a possibility, however we have to wait for the final report to be published. With the time frame of PLFS being July 2017- June 2018, Modi government will have a lot to answer since there is little surprise that demonetization has hurt the economy in ways we are still discovering. The other likely factors that can prove this rise in unemployment rates to be true include decline in labour force participation rate (proportion of population working or seeking jobs). This shows that the demand in the labour market is yet to match the increase in supply. To add to this, there has also been an increase in unemployment rate among educated. India’s policy focus should certainly move towards job-enabling growth not just mere growth. 

Unemployment Rate- ILO

Published yearly by the International Labour Organisation. Updated till 2016.

Brief Overview

India's Unemployment rate data in this page is sourced from the International Labor Organization(ILO). The data is published on a yearly basis by ILO. The unemployment rate is the percentage of the labour force who are unemployed and are actively looking for employment for the past four weeks. In India, unemployment is one of the biggest problems plaguing the economy. A lot of skilled and unskilled resources are unutilized due to lack of employment.

Increasing employment has been one of the main objectives of the governments. Programs like Mahatma Gandhi National Rural Employment Guarantee Scheme(MGNREGA) guarantees employment to rural workers for 100 days in a year. There are also web portals, employment exchange to make communication between employers and job seekers easier and efficient. 

For more information, please visit the official website.

Next Release Date: To be decided