Urban Unemployment Rate Rose To 10.09% In December From 8.96% In November: CMIE
To all those merrily still sinking into the new year mode, India's unemployment has been witnessed risen to 8.30% in December, the highest in 16 months, from 8.00% in the previous month, data from the Centre for Monitoring Indian Economy (CMIE) showed on Sunday.
Mahesh Vyas, MD, CMIE communicated a few internal details to a well-known publication where he stated that “the rise in the unemployment rate was ‘not as bad as it may seem,’ as it came on top of a healthy increase in the labour participation rate, which shot up to 40.48% in December, the highest in 12 months.
"Most importantly, the employment rate has increased in December to 37.1%, which again is the highest since January 2022,"
Further, BW People publication went deep into the phenomenon to record other views, RP Yadav, CMD, Genius Consultants was completely in sync with Vyas’s views. He said that, Although during the month of December 2022, unemployment rate have shot up to 8.3% in totality, however, as rightly said by Mahesh, the labour participation rate has gone up too by 40.48% in the same month which is a record for India as normally the labour participation has been floating at an average of 35% to 37% in India. That means, due to the formalization and launch of various schemes by the Government, whether it be formalisation of schemes like increasing the slabs in PF, GST, ESI, etc., more and more labour force is participating in the market which is a very good sign in my opinion. If this trend continues, the unemployment rate will also come down.
With the onset of 2024 elections hovering over Prime Minister Narendra Modi's administration, indeed it can prove out to be a very challenging task for Modi government containing high inflation and creating jobs for millions of young people entering the job market. But Indian government has been working very wisely to achieve a huge percent of employment numbers. The government has launched various notable schemes, the largest name being “Make In India Campaign” where the government is developing infrastructure for building and developing all consumable and other goods in India itself which is leading to multiple openings in the job market. Along with the same, government has also been supporting the labour mass with various schemes and incentives for the industrial sectors like textile, IT, start-ups etc. The government is also spending hugely for development of infrastructure which will create large employment opportunities. Apart from all these, the government is also investing in the Telecom sector for 5G implementation and also asset development in India, for example, funding Indian organizations to develop mobiles with high-end technologies. Another huge example is of I-phone, which was previously solely manufactured abroad, now India has the support and infrastructure to develop circuit boards and rest internal tech for making of the same.
Hence, all these measures will be able to create employment opportunities in India. There have been multiple schemes introduced like contribution to PF & ESIC by the Government, introduction of incentives for the MSMEs during the pandemic that has been continued after as well. If we consider the unemployment rates before pandemic, it had gone up to 18%, now that the market is open, it has come down to 8.3%. Yadav further added, “a notable move by the government was giving food grains to 90Cr people in India so that they at least get the food hence these people who went back to their villages or came back after the pandemic joined the labour force with full vigour and this is how, the labour participation rate is growing and in my views, ultimately by 2024-25, the unemployment rate might even come down from 8.3% to anything between 6-7%.”
Adding to Yadav’s views Aditya Narayan Mishra of CIEL HR Services stated that in 2022, we witnessed layoffs in the tech-driven startups and tech companies, largely due to the drying up of investments and the investors adopting a wait-and-watch mode. These global uncertainties also prompted IT and outsourcing sector to slow down their hiring in recent months. These have impacted the companies in the services sector as well.”
Further, Mishra is of the view that, “we expect increases in public Capex and policies to encourage participation of private players in the core sector in the upcoming Budget. These will certainly help the creation of new employment and hence, positively contributing to the growth of consumer goods and financial services.”
Highlighting the role of Skill India portal, it is considered to have been very active & interactive portal before pandemic but now leaders and people feel that the activity on the portal is not the same post-pandemic which had relatively gone down during the pandemic itself. Government is required to work on this once again to incentivise and aggregate all the partners for Skill India and see that the people get upskilled & reskilled as lot of technological advancements are coming in the market like introduction of AI, machine learning, 5G implementation in telecom, etc. These all will require highly skilled professionals and also the existing people will need to be upskilled and reskilled. Hence lot of investment needs to be done by the government in this matter to bring back Skill India to its former glory.
Further highlighting the initiatives of NSDC (national skill development corporation) Mishra believes that in order to increase the supply of skilled youth through schemes like NAPS (National Apprenticeship Promotion Scheme) will contribute significantly to all sectors of the economy. Given the fact that India is adding a large number of freshers to the labour pool every year, labour-intensive sectors like tourism, hospitality, travel, services, retail and construction have to be boosted while the wave of automation is bound to accelerate in all sectors. Hence, skill development is very crucial for our future.
