India records the highest unemployment rate in two years, says study

^{(Photo Credit : Ruthson Zimmerman)}

• India’s unemployment rate rose to 6.9%, which is highest in the last two years, according to a report by Centre for Monitoring Indian Economy, a prominent research institution.
  
• As of October 2018, only 42.6% of the adult population was willing to work.
  
• In the last one year, the number of job seekers went from 14 million to 29.5 million.
  

India’s unemployment rate jumped to a two-year high to 6.9% in October 2018, according to a report by the Centre for Monitoring Indian Economy, showing a worrying trend in the labour market.

The study comes at the heels of the two-year anniversary of India’s demonetisation exercise which banned higher-denomination notes in a bid to crack down on black money and push the economy towards using less cash.

Only 39.5% of the Indian adult population was employed as of October, the lowest employment percentage, said the report. An estimated 397 million people were employed in October 2018, down 2.4% compared to last year.

According to the report, India’s unemployment rate has been rising steadily since July last year spiking recently in October. As of October, about 29.5 million unemployed people were actively seeking jobs compared to 21.6 million in the same period last year.

The news is likely to be a setback for the Indian government, which is still struggling to keep up its promise of creating 10 million jobs every year. Labour participation continues to be a challenge for India as only 42.5% of India’s adult population was willing to join active workforce, highlighted the report.

Rise in job seekers

The report emphasises that following demonetisation, many exited the labour market as it became harder to find jobs.

However, in the last one year, the number of job seekers have doubled from 14 million in July 2017 to 29.5 million in October 2018. The sudden surge can be because of labour returning back to the market to look for jobs after demonetisation.

That was also partly due to few large openings being advertised by the government. Meanwhile, private enterprises didn’t adequately invest towards creating more jobs, added the report.