Unemployment debate: PM’s economic advisor explains why CMIE data is not reliable

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May 01, 2019 2:06 PM

The government must take cognisance of the issue of unemployment and should not hide the data as it has been seen doing, Mahesh Vyas said.

The debate over unemployment has been fueled further with senior economist and Member of Prime Minister’s Economic Advisory Council Shamika Ravi raising questions on reliability and credibility of the Centre for Monitoring Indian Economy (CMIE) data showing high unemployment. CMIE does not reveal the confidence interval and standard error of their data, Shamika Ravi said while expressing her concerns over the data in a recent television discussion with senior journalist Karan Thapar.

While the unemployment rates in Gujarat and Karnataka are 0.9 percent and 1.4 per cent, it is high at as much as 13.5 percent in Kerala, she said, while describing the presence of localised market in the country. Further, she suggested to look into the details of these localised markets in which jobs are created. However, she agreed that the quality of jobs could be an issue and public data should not be suppressed.

The debate around unemployment has gained steam in the recent past, with economists such as former RBI Governor Raghuram Rajan raising the issue of job crisis in India. Moreover, various opinion polls also point out that ‘jobs’ will be the biggest factor influencing the ongoing electoral outcomes.

Modi government indifferent to crisis?

Even as the data from the weekly estimates during April showed a fall in the unemployment rate in the last week to 6.5 percent compared to 8.4 percent previous week, there might not be something to be cheered for as the slip is just temporary and different from the monthly numbers, which indicate a steady rise in unemployment rate, said Chief executive of CMIE Mahesh Vyas in the same discussion.

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The increase in unemployment during the third week of April to 8.4 percent was due to increase in labour force participation, according to him. Many come to the employment market in the election season and while some get it, many do not, he said. However, the government should not take comfort in the small fall of one week , he added. The government must take cognisance of the issue of unemployment and should not hide the data as it has been seen doing, Mahesh Vyas said.

The seriousness of the issue of unemployment was also highlighted by National President of Swaraj India Yogendra Yadav who said, rather than monthly numbers we should look at the big picture of how the Modi government has performed in the last five years. Regarding this, he pointed out that while the government inherited a crisis of jobless growth to begin with, instead of improving it, it has only worsened the crisis. There has been destruction of jobs but the government rather than acknowledging it is suppressing the data, he added.

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