Low economic growth takes its toll, unemployment rate rises to 2.7%

Written by ENS Economic Bureau | New Delhi | Updated: Jun 21 2013, 14:16pm hrs
UnemploymentThe percentage of Indians employed in agriculture has slipped below 50 per cent. (Reuters)
The percentage of Indians employed in agriculture has slipped below 50 per cent, says the latest data on employment trends released by the government on Thursday.

But more worrying for the government is that the rising army of workers freed from the agricultural sector are unlikely to land a stable job in the urban areas.

The data shows a clear rise in unemployment among these workers with urban unemployment rising in the past two years.

The lead results released from the 68th round of National Sample Survey Organisation (NSSO) shows that male unemployment in urban areas has risen to 3.2 per cent. To make up for the lack of employment opportunities women are joining in as workers to supplement the family income (14.7 per cent against 13.8 per cent in the 66th round). So while fewer women in the rural areas compared to two years ago and even earlier are entering the job market, the reverse is happening in urban areas.

Overall unemployment measured by the usual status for both men and women have risen to 2.7 per cent across both rural and urban households, compared to 2.5 per cent in the earlier rounds showing the impact of the lower economic growth in the past two years. The numbers are a worrying sign for the government in a poll year.

As a result the workers are depending more on daily wage and other causal labour to earn their family meal. Measured by current daily status the percentage of unemployed has come down from 6.98 per cent to about 6 per cent. This has also happened as the number of workers available for employment has come down.

The lead results of NSSO show that despite a rise in the number of people in the employment age group, the percentage of them available in the job market has shrunk. From 34.1 per cent in 2009-2010 the percent has shrunk to 33.9 per cent. The same trend is visible when employment is measured by other yardsticks too, the data shows. The data bears out the anecdotal evidence that workers due to a combination of low work opportunities and the prospect of a dole like the NREGA have opted out of employment market, said Pronab Sen, Indias former chief statistician and current professor, Indian Statistical Institute.

The rise in unemployment is disconcerting as the total number of Indians now in the workforce has expanded by 14 million to reach 473 million, a growth of 3 per cent in just two years. Yet because of the lack of job opportunities 52 per cent of them are now self employed, the data shows.