Demonetisation, GST impact: After Demonetosation was introduced in the economy by Prime Minister Narendra Modi, over 1.54 million jobs were lost during the January-April 2017 period while another 0.42 million were lost during May-August 2017.
Demonetisation, GST impact: After Demonetosation was introduced in the economy by Prime Minister Narendra Modi, over 1.54 million jobs were lost during the January-April 2017 period while another 0.42 million were lost during May-August 2017. This data has been shown in a latest sequential data released by the Centre for Monitoring Indian Economy (CMIE), which states that a total of two million jobs were lost between January and August this year. However, the data released by the CMIE also shows that during the same time period there has been an addition of 4 million jobs for the January-April 2017 period and two million jobs for May-August 2017, on a year-on-year basis, according to Indian Express.
The latest report of CMIE states that Demonetisation led to an immediate and significant fall in labour participation rate. It added that there was an average labour participation rate of 47 per cent during the 10 months preceding demonetisation, but it gradually decreased to 44 per cent during the 10 months following demonetisation. IE quoted the Managing Director and chief executive officer of CMIE, Mahesh Vyas as saying, “Labour participation rate averaged 47 per cent during the first eight months of 2016. During the last four months of the year, which saw the launch of demonetisation, it averaged 46 per cent.”
The report further added that the introduction of the new tax regime, in the month of July this year had an immediate impact that was less severe. CMIE said, “Labour participation was at its lowest at 43 per cent in July 2017. But, during each of the following months — August, September and October 2017, it has increased.” It added, “Demonetisation was perhaps a lot more devastating to businesses because they could not survive the disappearance of cash. The impact was more widespread, but it had a strong element of wealth distribution. This wealth-distribution impact possibly cushioned the impact of demonetisation on job losses. In contrast, the impact of GST is not as widespread. It affects only the unviable units.”