Urban unemployment in India rose from 4.7% first quarter to 6.6% last quarter, 2017-18; jobs declined: CMIE-BSE

By Our Representative
A recent survey by the Centre for Monitoring Indian Economy (CMIE), India's leading business information company, in partnership with the Bombay Stock Exchange (BSE), has said that the unemployment rate in the country's urban areas in the four quarters of 2017-18 has risen steadily -- from 4.7 per cent in the first quarter to 5 per cent then 5.7 per cent and finally 6.6 per cent in the last quarter.
Claiming to be the producer of "high quality, fast frequency employment/ unemployment statistics", with a sample size that is "larger than that deployed by the Government of India's top data collecting centre, National Sample Survey Organization (NSSO), the CMIE-BSE survey has also found that rural unemployment too has been rising.
"It was 3.7 per cent in the first quarter of 2017-18 and then it was 3.6 per cent in the second quarter. Then it rose to 4.4 per cent in the third quarter and finally to 5.4 per cent in the last quarter", an analysis, carried out by top CMIE functionary Mahesh Vyas, has revealed.
According to Vyas, "The overall unemployment rate has risen from 4 per cent in the first quarter to 4.1 per cent in the second, 4.9 per cent in the third and then 5.8 per cent in the last quarter. During the last quarter, the unemployment rate increased steadily from 5 per cent in January 2018 to 6.1 per cent in February to 6.3 per cent in March 2018."
Ironically, the unemployment estimates come alongside well-known Indian English writer Chetan Bhagat, known to for his pro-Narendra Modi stances, reporting the results of what are called "yuppy survey" using his Twitter handle, which found that 87 per cent of the 20,000 respondents said it was ‘difficult’ to ‘very difficult’ to find a job.

Bhagat's "yuppy survey" further revealed that 61 per cent of the respondents said they expected anywhere between Rs 5,000 to Rs 15,000 a month. Referring to Bhagat's survey, the CMIE analyst says, "Chetan takes care to qualify that this is not a scientific survey. But, the sample size is large enough for more than just a dekko." He asks, "Where has the aspirational young Indian of 2014 vanished?"
Even as pointing out that the CMIE-BSE estimates of the last quarter are preliminary, Vyas says, "These will be finalised in the middle of May 2018 to account for non-responses", though historically, these revisions have been small and do not make any material difference to the broad inferences." He insists, "And the inference is clear -- that unemployment is rising and jobs are not."
Providing "preliminary estimations", the top analyst says, these suggest that "jobs did not increase during 2017-18 compared to 2016-17". These have declined from 406.7 million in fiscal 2016-17 to 407 million in fiscal 2017-18 -- a fall of about 0.7 million, or seven lakh, in a year, suggesting that the Government of India claims about rise in employment opportunities are not true.
CMIE-BSE estimates come even as the Government of India is all set to launch its enterprise survey to measure employment in medium, small and micro enterprises, with a special focus on the unorganised sector, i.e. enterprises that employ less than 10 workers. To be conducted by the Labour Bureau, it will use the 2013-14 Economic Census as its base.

While the results of the survey are expected by late 2018 or early 2019, ahead of the 2019 Lok Sabha elections, the CMIE analyst says, an enterprise survey may be useful to understand the distribution of employment by industry, by type of organisation of employment (public sector, private sector, etc) or nature of employment (part-time, full-time, permanent or temporary).
But he adds, it "cannot provide any estimate of the unemployment rate or the number of unemployed persons, which is our biggest challenge. A measure of the unemployment rate or the number of unemployed persons can only be found by conducting a household survey based on a large and representative sample."
Pointing out that the enterprise survey "is not an Economic Census either", Vyas says, "Given that an Economic Census is supposed to be conducted every five years and the last one was done in 2013-14, a new Economic Census is due now. But, how does that fit into this survey of the unorganised sector? The motivation for the new survey is that the government hopes to show that employment has increased in the unorganised sector."