Jobless economic growth continues to haunt India’s youth, with the country’s unemployment rate rising to a five-year high of five per cent in 2015-16, according to the latest annual household survey on employment conducted by Labour Bureau.
India’s economy grew 7.1 per cent in the first quarter of 2015-16, slowing from 7.9 per cent a year earlier. The country’s unemployment rate, as measured by the Bureau, stood at 4.9 per cent in 2013-14, 4.7 per cent in 2012-13 and 3.8 per cent in 2011-12.
Female job seekers were the worst hit as the pace of unemployment rose sharply to 8.7 per cent in 2015-16 compared to 7.7 per cent in 2013-14, data from the Fifth Annual Employment-Unemployment Survey showed. While unemployment rate in rural areas rose to 5.1 per cent in 2015-16 from 4.7 per cent in 2013-14, it declined to 4.9 per cent from 5.5 per cent in urban areas during the same period.
“This is a matter of serious concern, particularly rising unemployment among women,” said Amitabh Kundu, professor at the Institute for Human Development. “The government cannot ignore the fact that focusing on growth alone won’t solve the purpose. “Although this data is based on a small sample size, other indicators also point towards a rise in the unemployment rate in the country.”
The annual survey also showed that 47.8 per cent of the surveyed population was reported to be employed in 2015-16 compared with 49.9 per cent (also known as worker population ratio) two years earlier when the previous survey was conducted by the Labour Bureau, under the Ministry of Labour and Employment.
However, a few experts, including Mr. Kundu, said the Labour Bureau survey did not pick up the state-level trends and the sample size was too low.
“In the manufacturing sector, growth has come predominantly from improvement in efficiency and not too much due to a rise in output, so the growth in employment is much slower,” said Proban Sen, former chairman, National Statistical Commission.
“Second, the pattern of employment in the corporate sector is changing. Companies are looking to hire productive workers so there is a reduction in absorption of labour,” he said.
Mr. Sen also added that the construction sector, which is the most labour-intensive sector following agriculture, is not growing, leading to slow growth in job creation.
Fewer households benefited from various employment schemes of the government in 2015-16, the survey showed.
For instance, the benefits of Mahatma Gandhi National Rural Employment Guarantee Act scheme were availed by 21.9 per cent households compared to 24.1 per cent households in 2013-14.
The survey showed a decline in the proportion of self-employed and salaried workers and a rise in contractual employment.
“The fact that both self-employment and government programme jobs are dipping is disturbing, showing unemployment rate is high,” Mr. Kundu said. Graduates and post-graduates have cited non-availability of jobs that matched their education or skill and experience, as the main reason for unemployment.