Employment rate down, unemployment rate up: CMIE "contradicts" Modi claim

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

Irrational? Basis for fear among Hindus about being 'swamped' by Muslims

I was amused while reading an article titled "Ham Paanch, Hamare Pachees", shared on Facebook, by well-known policy analyst Mohan Guruswamy, an alumnus of the John F. Kennedy School of Government, Harvard University, and the Graduate School of Business, Stanford University. Guruswamy, who has also worked as an advisor to the Finance Minister with the rank of Secretary to the Government of India, seeks to probe, as he himself states, "the supposed Muslim attitude to family planning"—a theme that was invoked by Narendra Modi as Gujarat Chief Minister ahead of the December 2002 assembly polls.

Why's Australian crackdown rattling Indian students? Whopping 25% fake visa applications

This is what happened several months ago. A teenager living in the housing society where I reside was sent to Australia to study at a university in Sydney with much fanfare. The parents, whom I often met as part of a group, would tell us how easily the boy got his admission with the help of "some well-meaning friends," adding that they had obtained an education loan to ensure he could study at a graduate school.

Tracking a lost link: Soviet-era legacy of Gujarati translator Atul Sawani

The other day, I received a message from a well-known activist, Raju Dipti, who runs an NGO called Jeevan Teerth in Koba village, near Gujarat’s capital, Gandhinagar. He was seeking the contact information of Atul Sawani, a translator of Russian books—mainly political and economic—into Gujarati for Progress Publishers during the Soviet era. He wanted to collect and hand over scanned soft copies, or if possible, hard copies, of Soviet books translated into Gujarati to Arvind Gupta, who currently lives in Pune and is undertaking the herculean task of collecting and making public soft copies of Soviet books that are no longer available in the market, both in English and Indian languages.

Gujarat slips in India Justice Report 2025: From model state to mid-table performer

Overall ranking in IJR reports The latest India Justice Report (IJR), prepared by legal experts with the backing of several civil society organisations and aimed at ranking the capacity of states to deliver justice, has found Gujarat—considered by India's rulers as a model state for others to follow—slipping to the 11th position from fourth in 2022.

Punishing senior citizens? Flipkart, Shopsy stop Cash on Delivery in Ahmedabad!

The other day, someone close to me attempted to order some goodies on Flipkart and its subsidiary Shopsy. After preparing a long list of items, this person, as usual, opted for the Cash on Delivery (popularly known as COD) option, as this senior citizen isn't very familiar with online prepaid payment methods like UPI, credit or debit cards, or online bank transfers through websites. In fact, she is hesitant to make online payments, fearing, "I may make a mistake," she explained, adding, "I read a lot about online frauds, so I always choose COD as it's safe. I have no knowledge of how to prepay online."

A conman, a demolition man: How 'prominent' scribes are defending Pritish Nandy

How to defend Pritish Nandy? That’s the big question some of his so-called fans seem to ponder, especially amidst sharp criticism of his alleged insensitivity during his journalistic career. One such incident involved the theft and publication of the birth certificate of Masaba Gupta, daughter of actor Neena Gupta, in the Illustrated Weekly of India, which Nandy was editing at the time. He reportedly did this to uncover the identity of Masaba’s father.

Of lingering shadow of Haren Pandya's murder during Modi's Gujarat days

Sunita Williams’ return to Earth has, ironically, reopened an old wound: the mysterious murder of her first cousin, the popular BJP leader Haren Pandya, in 2003. Initially a supporter of Narendra Modi, Haren turned against him, not sparing any opportunity to do things that would embarrass Modi. Social media and some online news portals, including The Wire , are abuzz with how Modi’s recent invitation to Sunita to visit India comes against the backdrop of how he, as Gujarat’s chief minister, didn’t care to offer any official protocol support during her 2007 visit to Gujarat.

Area set aside in Ahmedabad for PM's affordable housing scheme 'has gone to big builders'

Following my article on affordable housing in Counterview, which quoted a top real estate consultant, I was informed that affordable housing—a scheme introduced by Prime Minister Narendra Modi—has deviated from its original intent. A former senior bureaucrat, whom I used to meet during my Sachivalaya days, told me that an entire area in Ahmedabad, designated for the scheme, has been used to construct costly houses instead.

Just 5% Gujarat Dalit households 'recognise' social reformers who inspired Ambedkar

An interesting survey conducted across 22 districts and 32 villages in Gujarat sheds light on the representation of key social reformers in Dalit households. It suggests that while Dr. B.R. Ambedkar's photo was displayed in a majority of homes, images of Lord Buddha and the 19th-century reformist couple, Savitribai Phule and Jyotiba Phule, were not as commonly represented.

Search This Blog