With various reports showing rise in unemployment, the debate around job creation vs job loss has been gaining steam. Moreover, there has been a fall in labour force, show recent data. This seems a serious concern in an economy whose working age population is expected to grow to over a 100 crore people by 2050, as estimated by the Regional Human Development Report of the United Nations Development Programme (UNDP).
Earlier last week, Financial Express Online had written about concerns over falling labour force in India, an unusual phenomenon in an economy with growing working age population. Now, various data has come in public domain, which supports the argument.
The unemployment rate in India rose to 7.2 per cent in February 2019 from 5.9 per cent in February 2018, show recent data by Centre of Monitoring Indian Economy (CMIE).
Chief executive of Centre for Monitoring Indian Economy (CMIE) Mahesh Vyas told Reuters that this rise in unemployment rate is despite the fall in number of job seekers. He estimated that the number of employed persons fell to to 40 crore in February 2019 from 40.6 crore a year ago.
Speaking of the impact of demonetisation, Mahesh Vyas had earlier told The Indian Express that while the job losses could have been at least 35 lakh due to note ban, the reduction in the labour force was to the tune of 150 lakh. That means people who were unemployed just before demonetisation stopped even looking for jobs and the labour force shrank.
Prior to the February unemployment data released by CMIE, a leaked report had revealed that unemployment in India had hit a 40-year-high of 6.1 per cent in 2017-18.
Various experts, both home and abroad, have often pointed out to the concern for Indian economy, if the current trend of unemployment continues.
However, Union Minister for housing and urban development Hardeep Puri on Wednesday rejected the CMIE report. He said that Pradhan Mantri Awas Yojana alone has created 61.5 lakh jobs in urban India.
The government also plans to junk the NSSO data and instead use findings of the Labour Bureau survey on jobs created under the Micro Units Development and Refinance Agency (MUDRA) scheme, to estimate the data on jobs, The Indian Express had reported.
Meanwhile, the World Bank recently suggested India to focus on raising exports. This can lead to better jobs and higher wages in India, including more formal sector employment for youth and women, World Bank said in the report.