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

Tradespeople sit on the side of a road as they wait to get hired for work in Mumbai, India, November 6, 2017. (Photo: REUTERS/Danish Siddiqui)

NEW DELHI (Reuters) – An official survey that has been withheld by the government shows India’s unemployment rate rose to a 45-year high during 2017-2018, 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-June 2018 showed the unemployment rate stood at 6.1 percent, 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 percent.

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 7 percent plus 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 percent of GDP to about 25 percent and create jobs for an estimated 1.2 million youth entering the marker failed to take off.

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

Worse, the labor force participation rate – the proportion of population working or seeking jobs – declined to 36.9 percent in 2017/18 from 39.5 percent in 2011/12, the report said. The comparable rate for the United States was 63.1 percent in December.


Himanshu, an associate professor at New Delhi’s Jawaharlal Nehru University who specializes on 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 kind 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.

The government declined to confirm or deny the findings contained in the report.

“We have not released the report. I do not want to comment on it,” Pravin Srivastava, India’s chief statistician, told Reuters.

But he said the report was not final and would be released after a review.

The gloomy jobs data could be awkward for Modi’s Hindu nationalist government to explain with a general election looming and opinion polls already showing the ruling Bharatiya Janata Party unlikely to keep its parliamentary majority.

“It’s a very, very serious issue, and that is the reason why the government didn’t want this data to come out in the public domain,” said former finance minister Yashwant Sinha.

A report released by the All India Manufacturers’ Organisation said last month 3.5 million jobs had been lost since 2016, mainly due to demonetization and rising working costs after the launch of the national tax.

Some sociologists say that there are instances of a correlation between high unemployment and an increase in criminal behavior.

“The anti-social activities, they have risen in many places. Whether roadside violence, theft, robbery, black-marketing, prostitution, all kinds of things,” said Abhijit Dasgupta, professor of sociology at the University of Delhi.



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