India’s jobless rate hits 45-year high, says report

Updated February 01, 2019


Report is a blow to Indian PM Narendra Modi months before India's general elections. — File photo
Report is a blow to Indian PM Narendra Modi months before India's general elections. — File photo

NEW DELHI: An official survey that has been withheld by the government shows India’s unemployment rate rose to a 45-year high during 2017-18, the Business Standard newspaper reported on Thursday, delivering a blow to Prime Minister Narendra Modi just months before what is expected to be a closely fought general election.

A political controversy over the survey erupted after the acting chairman and another member of the body that reviewed the jobs data resigned, saying there had been a delay in its scheduled December release and alleging interference by other state agencies.

The assessment by the National Sample Survey Office (NSSO) conducted between July 2017 and June 2018 showed the unemployment rate stood at 6.1 per cent, the highest since 1972-73, the newspaper reported.

That year, when India was just coming out of a war with Pakistan and hit by global oil shocks like other oil-importing countries, the unemployment rate was 5.18 per cent.

Rahul Gandhi, the leader of the main opposition Congress party who the polls show is closing in on Modi’s lead in the election due by May, said the job report showed “a national disaster”.

India’s economy has been expanding by over 7 per cent annually — the fastest pace among major economies — bit uneven growth has meant that there are not enough new jobs to keep pace. And critics say the government’s claims of economic success have sounded increasingly hollow.

Modi’s ambitious Make-in-India project to lift the share of domestic manufacturing from 17 per cent of GDP to about 25 per cent and create jobs for an estimated 1.2 million youth entering the market failed to take off.

The report showed frighteningly high levels of unemployment among the young, with 18.7 per cent of urban males aged between 15 and 29 without work, and a jobless rate of 27.2 per cent for urban females in the same age group.

Worse, the labour force participation rate — the proportion of population working or seeking jobs — declined to 36.9 per cent in 2017-18 from 39.5 per cent in 2011-12, the report said. The comparable rate for the United States was 63.1 per cent in December.

Himanshu, an associate professor at New Delhi’s Jawaharlal Nehru University who specialises in development economics, said that the jobs crisis was everywhere to see.

“News and data like thousands of PhDs applying for waiter jobs in Mumbai or millions applying for just a thousand jobs in Gujarat or 10 million applying for a small number of jobs in railways,” he said. “I mean, these kinds of examples are everywhere,” he said, pointing to street protests by caste and other interest groups seeking quotas for government jobs. The data provides the first comprehensive assessment of India’s employment since Modi’s decision in November 2016 to withdraw most of the country’s banknotes from circulation overnight.

After the chaotic launch of a national sales tax in July 2017, hundreds of thousands have lost jobs in small businesses.

Published in Dawn, February 1st, 2019