Skip to main content

Employment rate down, unemployment rate up: CMIE "contradicts" Modi claim that it's data crisis not jobs crisis

By Our Representative
Virtually contradicting Prime Minister Narendra Modi's claim that India is not facing a jobs crisis but data crisis, the country's top data consultating firm, Centre for Monitoring Indian Economy (CMIE) has declared that the labour force participation rate -- expressing the desire the able-bodied persons to find a job -- continues to decline.
According to CMIE's latest estimates, the labour force participation rate fell from 46.1 per cent in fiscal 2016-17 to 43.5 per cent in 2017-18, and it is further down to 42.7 per cent in the first quarter (April to June) of the present financial year, 2018-19.
In a fresh incisive analysis based on CMIE's labour force data, CMIE managing-director Mahesh Vyas says, "It is the labour force participation rate that is a better measure of the labour market conditions in India. It is not good if the number of people willing to work declines. It is not good if an increasing proportion of the working-age population express no interest in working. But, this is what happened..."
He believes, "The ripple-effects of the twin shocks of demonetisation and Goods and Services Tax (GST) continue to impact the economy. Consumer demand is muted. Persistent low food inflation is a possible reflection of this. Low investment demand is a clear reflection of poor consumer demand. Capacity utilisation is still low. In such conditions, the stagnation we observe in employment is understandable."
As for employment, says Vyas, things "turned worse" here, too. Thus, during the first quarter of 2018-19, persons employed fell to 401.9 million as against 406.2 million in in 2017-18 and 406.7 million in 2016-17. Thus, he adds, employment rate fell to 40.4 per cent in the first quarter of 2018-19, as against 41.45 per cent 2017-18 and 42.59 per cent in 2016-17.
Comments Vyas, "Employment must grow because, as population grows, the number of people seeking employment also increases. If employment is stagnant while the population keeps growing, the employment rate (which is the proportion of working-age population that is employed) declines."
Vyas suggests that failure of the jobs market to pick up is a direct reflection of the current economic scenario.
According to him, "Fiscal 2017-18 was a difficult year for the Indian economy. Real Gross Value Added (GVA) growth slowed down to 6.5 per cent compared to 7.1 per cent in the previous year. This was also the worst year for growth since 2013-14. The investment ratio, at 28.5 per cent was the lowest since 2011-12. It has been falling relentlessly indicating declining investment demand in the country."
He adds, "This fall in investment demand is also captured by CMIE’s CapEx database. Announcement of new investment projects declined by 38.4 per cent and completion of new projects declined by 26.8 per cent in 2017-18 compared to the previous year. Foreign direct investments were down by 15 per cent."
Squarely blaming demonetisation for the present economic crisis, Vyas says, "After demonetisation a large number of unemployed persons stopped looking for jobs. These were mostly youngsters, many of them were uneducated and were women. Why did they stop looking for jobs is a different matter. The relevant and important observation is that they stopped looking for jobs."
He adds, "As these unemployed persons stopped looking for jobs, they were not called unemployed any more. They hadn’t found jobs so they were not classified as employed either. They simply exited the labour force. This led to shrinking of labour force and a misleading fall in the unemployment rate."
All this, believes Vyas, suggests that if "2017-18 was as difficult year, 2018-19 is a challenging year already." He adds, "Rains have been somewhat erratic, kharif sowing is 10 per cent below last year’s, crude oil prices have risen, Foreign Portfolio Investments (FPIs) are exiting, the rupee is weak, the balance of payments is vulnerable and the fisc is in danger of running amok. These are not the best times to expect private entrepreneurs to invest and so not the best time to find new jobs."

Comments

TRENDING

Modi, Shah 'forget': Gandhi’s first Satyagraha was against citizenship law of South Africa

By Nachiketa Desai*
Hindu fanatic Nathuram Godse assassinated Mahatma Gandhi once on January 30, 1948 but his followers raising the war cry of ‘Jai Sriram’ are killing the Mahatma every day. In his home state of Gujarat, Gandhiji was killed a thousand times in 2002 when over 2,000 Muslims were butchered, their women raped, homes and shops plundered and set on fire and even unborn babies ripped out of the wombs of their mothers.

Union Budget 'moves away' from Right to Education, 1.3 lakh schools closed down

By Dr Aparajita Sharma*
It was a shocking reply by the Union human resource development minister to a question raised in Parliament on closure of schools in a country where lakhs of children are still out of school. On December 2, the minister, Ramesh Pokhriyal ‘Nishank’, told Lok Sabha that the NITI Aayog’s education project, Sath-E, has led to 35,996 schools of different levels being merged in Madhya Pradesh, 4,312 in Jharkhand and 1,803 in Odisha. NITI Aayog is the Central Government’s policy think-tank.

CAA-NPR-NRC will 'target' 99% homeless, who are without birth certificates: NCU

Counterview Desk
Claiming to base on a survey in five states (Andhra Pradesh, Bihar, Jharkhand, Maharashtra and Tamil Nadu), which finds that over 99% of the homeless people do not have birth certificates, a civil rights organization which networks activists, researchers, urban practioners, lawyers, informal sector workers, has claimed that the Citizenship Amendment Act (CAA), as also the proposed National Register of Citizens (NRC) and the National Population Register (NPR), are likely to adversely impact this section the most.

Modi 'warned': Will not remain silent when women are labelled terrorists and traitors

Counterview Desk
As many as 13 women's rights organizations and 162 individuals have issued an open letter to Prime Minister Narendra Modi stating that in the light of hate speeches during Delhi elections, especially directed against women, it is his "Constitutional duty to protect all citizens" and tell his partymen "to fight the elections in a manner that upholds the Constitution, not one that increases the fear and insecurity among women."

Savarkar 'criminally betrayed' Netaji and his INA by siding with the British rulers

By Shamsul Islam*
RSS-BJP rulers of India have been trying to show off as great fans of Netaji. But Indians must know what role ideological parents of today's RSS/BJP played against Netaji and Indian National Army (INA). The Hindu Mahasabha and RSS which always had prominent lawyers on their rolls made no attempt to defend the INA accused at Red Fort trials.

Savarkar in Ahmedabad 'declared' two-nation theory in 1937, Jinnah followed 3 years later

By Our Representative
One of the top freedom fighters whom BJP and Prime Minister Narendra Modi revere the most, Vinayak Damodar Savarkar, was also a great supporter of the two nation theory for India, one for Hindus another for Muslims, claims a new expose on the man who is also known to be the original proponent of the concept of Hindutva.

Anti-CAA: Mallika Sarabhai joins students, faculty to protest dy CM's 'divisive' talk

By Our Representative
Taking strong exception to deputy chief minister Nitin Patel’s statement against those protesting against the Citizenship Amendment Act (CAA) and the proposed National Register of Citizens (NRC), well-known danseuse Mallika Sarabhai has joined tens of activists and students and faculty of Gujarat University, CEPT University, Indian Institute of Management-Ahmedabad, Gujarat Vidyapeeth and Nirma University to say that they are seeking “azadi” from the fascist and communal forces of the country.

Mystery around Gujarat PSU 'transfer' of Rs 250 crore to Canadian firm Karnalyte

By AK Luke, IAS (Retd)*
While returning from a Board meeting of the Oil India Limited (OIL) in Ahmedabad some time in 2012, two officers of the Gujarat State Fertilizers and Chemicals Ltd (GSFC), Nanavaty and Patel,  saw me off at the airport. They said they were proceeding to Canada in connection with a project GSFC had entered into with a company there. As we were running late, I hastily wished them the best.

Savarkar 'opposed' Bhagat Singh's, Netaji's dream of India, supported British war efforts

By Shamsul Islam*
In a shocking development, the student wing of the RSS put the busts of martyrs Bhagat Singh and Subhash Chandra Bose with Savarkar's on one pedestal at the University of Delhi late in the night on August 20, 2019. Bhagat Singh sacrificed his life for a socialist-democratic-secular republic and Netaji raised Azad Hind Fauj (INA) consisting of people of all religions and regions for armed liberation of India.