The unemployment rate in India is on the rise
According to the Centre for Monitoring Indian Economy (CMIE), in February 2019 India’s jobless rate rose to 7.2% which is the highest rate since September 2016. Despite a fall in the number of job seekers, the unemployment rate has climbed. The estimated number of employed people in India has fallen by 6 million compared to last year, according to Mahesh Vyas, Managing Director and CEO of CMIE.
IZA World of Labor authors Indraneel Dasgupta and Saibal Kar have looked at the labor market in India since the 1990s. According to them: “Employment continues to be overwhelmingly informal in nature, without security, income stability or the benefit of protective legislation.” In their article they add: “Major reforms are needed in a host of areas before India’s most pressing labor-related issues can be addressed.”
Many economists agree that CMIE’s estimations are more credible than the data on jobless people produced by the government as the numbers are baseon surveys of tens of thousands of families across India. However, ahead of the general election due to be held from April 11, 2019 to May 19, 2019, the statistics will not play in favor of Prime Minister Narendra Modi.
In January this year the CMIE also released a report according to which 11 million people lost their jobs in 2018 after the demonetization of high-value bank notes in 2016. Another factor was the tumultuous launch of new goods and services taxes in 2017 which hit millions of small businesses.
According to Dasgupta and Kar: “Increasing the impact of output growth on employment outside agriculture, bringing a larger proportion of the population within the ambit of income tax, and formalizing the informal sector remain India’s greatest policy challenges.”
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