Unemployment being the major issue in the country is just ascending its number than descending as reported by Quartz, in rising over the last few months as it spiked to 7.1% in the week ended February 25.
According to a February 27 report published by the Centre for Monitoring Indian Economy (CMIE), an independent think-tank that tracks business and economic data reveals that around 31 million people in India are currently looking for jobs. The report also says that February 2018 will see the highest unemployment rate in the last 15-16 months.
The report also depicts that unemployment was lowest last in July 2017 and since then, the rate has been steadily rising. Mahesh Vyas, CEO of CMIE, says that “Given that the recent three weeks have consistently shown unemployment rates at close to 7%, it is possible to infer now that the rate is back to the levels just before demonetisation,”
The impact of demonetization was severelt impacted on employment level and due to this only the rates were being declined. Onw of the reason for the decrease is also that the youth was not even trying to look for jobs anymore because of the crippling state of the economy at that point, hence, they were busy acquiring new skills.
During that period, the labour participation rate (the total number of people employed or actively hunting for jobs) hovered between 46% and 48% before demonetisation. By July 2017, it fell to below 43%. Now the CMIE expects it to go past 44% by the end of February 2018.
As reported by Quartz, Vyas also mentioned that, “The labour force has still not recovered entirely, and remonetisation by the Reserve Bank of India (RBI) was not enough to bring labour participation to its earlier levels,” While people are slowly coming back to work now, enough jobs have not been added, hence, the rise in unemployment.
Employment opportunities will not be great in the near future too. In addition to the 31 million unemployed as of February 25, urban India will see a spike in demand for jobs as a fresh batch of college graduates enters the workforce in May. But the number of jobs created in the financial year 2018 is an estimated 600,000.
The report concludes by mentioning that “In rural India, activity will slow down after the rabi crop is harvested. Employment opportunities will be limited till the preparation for the Kharif season begins around mid-May,”