Unemployment rises to 5 per cent in Financial Year 2015-16

 According to the latest annual household survey on employment conducted by Labour Bureau, 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.
Highlights of the report:

• India’s unemployment rate stood at 4.9% in 2013-14, 4.7% in 2012-13 and 3.8% in 2011-12.
• Female job seekers were the worst hit as the pace of unemployment rose sharply to 8.7% in 2015-16 compared to 7.7% in 2013-14. In urban areas, the female unemployment rate was estimated at 12.1 per cent at the as against 3.3 per cent for males and 10.3 per cent for transgender. For rural areas, the female unemployment rate stood at 7.8 per cent in 2015-16 as against 4.2 per cent for males and 2.1 per cent for transgender.
• While unemployment rate in rural areas rose to 5.1% in 2015-16 from 4.7% in 2013-14, it declined to 4.9% from 5.5% in urban areas during the same period.
• The annual survey also showed that 47.8% of the surveyed population was reported to be employed in 2015-16 compared with 49.9% (also known as worker population ratio) two years earlier when the previous survey was conducted by the Labour Bureau.
• The survey also shows that fewer households benefited from various employment schemes of the government in 2015-16. For instance, the benefits of Mahatma Gandhi National Rural Employment Guarantee Act scheme were availed by 21.9% households compared to 24.1% 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 increasing feature of contractual work in the country was also reflected in the data, with about 77 per cent of the households having no regular wage/salaried person. About 64.9 per cent of the regular wage/ salaried workers, 67.8 per cent of the contract workers and 95.3 per cent of the casual workers did not have a written job contract in the country in 2015-16, the survey showed.
• Around 67.5 per cent of the self employed workers had average monthly earnings of up to Rs 7,500 and only 0.1 per cent of the self employed were estimated to have earnings above Rs 1 lakh. Similarly, more than half of the regular wage/salaried workers at around 57.2 per cent had monthly average earnings of up to Rs 10,000.
• Among states, Madhya Pradesh with 35.8 per cent households had the highest proportion with average monthly earnings not exceeding Rs 5,000, followed by West Bengal at 34.5 per cent, Uttar Pradesh at 30.1 per cent and Odisha at 29.8 per cent.
• The data showed that about 24 per cent households benefitted from government’s employment generating schemes like MGNREGA, Prime Minister’s Employment Generation Programme, Swarnajayanti Gram Swarojgar Yojana and Swarnajayanti Gram Swarojgar Yojana among other. Only three Northeastern states, Tripura, Manipur and Mizoram, had more than 70 per cent of households that benefited from MGNREGA.
• The survey was conducted during April-December 2015 comprising of a total sample of 1,56,563 households, with 88,783 rural households and 67,780 urban households.

Analysis:

• Both self-employment and government programme jobs are dipping is disturbing, showing unemployment rate is high.
• Graduates and post-graduates have cited non-availability of jobs that matched their education or skill and experience, as the main reason for unemployment.
• In 2015, India added the fewest organised-sector jobs—in large companies and factories—in seven years across eight important industries.
• The proportion of jobs in the unorganised sector—without formal monthly payment or social security benefits—is set to rise to 93% in 2017.
• Rural wages are at a decadal low, as agriculture—which accounts for 47% of jobs—contracted 0.2% in 2014-15, growing 1% in 2015-16.
• As many as 60% of those with jobs do not find employment for the entire year, indicating widespread ‘under-employment’ and temporary jobs.
• With large corporations and public-sector banks financially stressed, the average size of companies in India is reducing, at a time when well-organised large companies are central to creating jobs.

By: Vishal