The drop in unemployment rates, revealed by the labour force indicators for urban areas released by the National Statistical Office, should not lull us into complacence. The unemployment rate of 9.3% in January-March 2019 quarter, the lowest in four quarters, and the marginal drop in unemployment among the 15-29-year olds, who account for a third of the population, to 22.5% from 23.7% in the preceding quarter, must be understood in the context of multiple factors: a drop in those seeking work, resulting in a lower labour force participation rate, and improved social security systems. Then again, regions with stronger social safety nets, informal or state-sponsored, tend to show higher rates of unemployment, rendering unemployment not a particularly accurate index of social distress in India.
Unemployment data for April-June 2018 is missing. A person is considered as unemployed in a week if she did not work even for one hour during that week. The figures on labour force participation rate, that is, the number of people of seeking employment as a proportion of the total population, edged up between April and December 2018 — it was at 38.2% in the last quarter of 2018 — up from 37.7% in the March quarter of 2018. However, it recorded a dip in the March quarter of 2019 to 36%. Women’s share among employment seekers has also registered a dip. These fluctuations in the number of people seeking employment need further investigation.
With the same number of people working, if the number of those seeking work falls, the unemployment rate would fall. Enhanced social security would also, at the margin, depress the number of job seekers. The government needs to ensure steady collection, analysis and availability of data, regardless of how happy a picture the data shows.
Courtesy - The Economic Times.