The labour market in India seems to be struggling for a while now. The latest data from a think tank, Centre for Monitoring Indian Economy (CMIE), shows that the estimated unemployment rate went to a 27-month high of 7.38 percent in December 2018. In another shocking revelation, nearly 1.09 crore people lost their job in last 12 months. The number of people with jobs fell from 40.78 crore in December 2017 to 39.69 crore in December 2018.
CMIE' "Unemployment Rate in India" report analysed dat from more than 1,58,000 households. Moreover, the data also showed that besides an increase in the unemployment rate, the Indian labour market is also witnessing a dip in the labour participation rate. The Financial Express reported that the unemployment rate in December 2018 went up to 7.38 percent in comparison to 6.62 percent in November 2018 and 4.78 percent in December 2017. Interestingly, this is the highest unemployment rate in almost 27 months, Before this, the rate was highest in September 2016 when it stood at a high of 8.46 per cent.
The higher rate of unemployment in recent times is largely attributed to the job losses in rural areas. Nearly 91.5 lakhs or 83 percent of the total 1.09 crore jobs loss were witnesses in the calendar year 2018.
However, similar to the decrease in the unemployment rate, the data from CMIE also shows a dip in the estimated labour participation rate which means a proportion of working-age people (which is people of 15 years or more) who are willing to work and are either actually working or are actively looking for work.
In December 2018, the estimated labour participation rate tanked to 42.47 as against 43.57 in December 2017. Mahesh Vyas, MD and CEO of CMIE, wrote an article in October 2018 where he wrote, "In my opinion, the LPR is more important than the unemployment rate because it tells us how many people are willing to work."