Urban unemployment rises to 8.2 per cent

by Mahesh Vyas

Unemployment is inching up. In the week ended October 8, it was 5.8 per cent compared to 5 per cent in the preceding week. In urban India, unemployment was 8.2 per cent. This is the highest unemployment rate in urban India in the past 11 months. Urban labour participation rate has recovered to its level during the last December-January period.

The rise in labour participation rate and the unemployment rate shows that labour is returning back to the labour markets but, it isn’t finding jobs.

The fall in labour participation rate began soon after demonetisation. We are probably seeing a recovery after about a year.

The BSE-CMIE effort at measuring unemployment in India has been a witness to this tumultuous period. The effort has completed five Waves of surveys. The first and second Waves were done during the pre-demonetisation period. These were during January-April 2016 and May-August 2016. Demonetisation occurred mid-way through the third Wave of September-December 2016. Two more Waves have been completed after this.

At the end of each Wave a statistical volume - "Unemployment in India, A Statistical Profile" is produced. All the five Statistical Profiles produced so far are now available in freely downloadable pdf formats on CMIE’s website https://unemploymentinindia.cmie.com and on BSE’s website, http://www.bseindia.com/bsecmieindices/unemployment.aspx

These about-185-page statistical volumes provide data that can help us understand employment and unemployment in India through the demonetisation period and going ahead, through GST.

These statistical profiles provide estimates of the labour force, labour participation rate, employed and unemployed persons and the unemployment rate during a Wave.

A useful set of additional indicators estimated in these volumes is the greater labour force and the greater unemployment rate. This concept is explained below.

A person is considered unemployed if s/he is willing to work and is actively looking for a job but, is unable to get a job. Three conditions must be fulfilled - the person must be unemployed, must be willing to work and, must be actively looking for a job. The last criterion implies applying for jobs, appearing for interviews, making enquiries for jobs, standing in queues for jobs, etc. If an unemployed person is willing to work but is not actively looking for a job then s/he is not counted as an unemployed person for calculating the unemployment rate. This is the international practice and this is what we follow.

The labour force is simply the sum of the unemployed as defined above and the employed. And, the unemployment rate is the ratio of the unemployed to the labour force.

Now, consider the unemployed who are willing to work but are not actively looking for a job. Why should an unemployed person who is willing to work not be looking for a job? Possibly, because such a person does not believe that a job is available. Maybe, there is a seasonality in seeking jobs. Or, there could be social constraints that refrain a person from seeking a job. While the reasons for such behavior could be interesting, it is perhaps, very important to know the size of such persons who are willing to work but do not actively look for jobs.

The statistical profiles provide estimates of these unemployed who are willing to work but are not actively looking for a job. The sum of unemployed who are willing to work and are actively looking for a job and, unemployed who are willing but not actively looking for a job is the greater unemployed. Interestingly, the unemployed who are willing to work but are not actively looking for a job was about 70 per cent of the size of the unemployed who are willing and looking for a job.

During 2016, the unemployment rate was 8.2 per cent but, the greater unemployment rate was 15 per cent.

"Unemployment in India, A Statistical Profile" presents estimates of India and 25 major states. Separately, estimates are presented for urban and rural regions of the individual states as well. Data on labour force, employment, unemployment, greater unemployment, etc. is also presented by educational qualification, age and gender.

BSE has been an enabling partner in the measurement of unemployment in India and in making these statistical profiles freely available for public use, for informed debate, research and policies.

While this is a good beginning to measure unemployment, we need to push the frontiers to measure the nature of employment in India, the dynamics of jobs creation in India and to identify the sectors or regions of jobs vulnerabilities.


First Published in Business Standard Link

CMIE STATISTICS
Unemployment Rate
Per cent
4.5 -0.1
Consumer Sentiments Index
Base September-December 2015
96.5 +0.2
Consumer Expectations Index
Base September-December 2015
95.7 0.0
Current Economic Conditions Index
Base September-December 2015
97.8 +0.5
Quarterly CapeEx Aggregates
(Rs.trillion) Dec 16 Mar 17 Jun 17 Sep 17
New projects 2.33 3.84 2.07 1.03
Completed projects 1.01 1.94 1.16 1.00
Stalled projects 1.14 0.73 2.67 0.67
Revived projects 0.18 0.67 0.30 0.29
Implementation stalled projects 0.83 0.33 0.68 0.62
Updated on: 16 Dec 2017 8:20PM
Quarterly Financials of Listed Companies
(% change) Dec 16 Mar 17 Jun 17 Sep 17
All listed Companies
 Income 6.2 10.2 9.8 8.2
 Expenses 6.3 11.9 10.0 9.5
 Net profit 40.2 16.0 -19.6 -18.1
 PAT margin (%) 6.0 6.0 5.3 5.6
 Count of Cos. 4,509 4,444 4,325 4,177
Non-financial Companies
 Income 5.9 11.8 10.4 8.1
 Expenses 7.2 15.6 10.6 8.1
 Net profit 24.5 -2.3 -25.0 -5.4
 PAT margin (%) 6.2 6.2 5.2 6.4
 Net fixed assets 6.9 9.3
 Current assets 2.7 79.6
 Current liabilities 8.8 10.0
 Borrowings 4.8 10.6
 Reserves & surplus 6.3 5.3
 Count of Cos. 3,484 3,440 3,358 3,245
Numbers are net of P&E
Updated on: 16 Dec 2017 8:20PM
Annual Financials of All Companies
(% change) FY14 FY15 FY16 FY17
All Companies
 Income 10.0 5.2 1.1 6.7
 Expenses 9.9 5.2 1.2 6.9
 Net profit -2.3 1.4 -13.1 20.6
 PAT margin (%) 3.2 3.2 2.9 6.4
 Assets 12.3 9.4 9.7 8.6
 Net worth 9.6 8.7 10.6 7.9
 RONW (%) 6.2 6.1 5.1 9.2
 Count of Cos. 24,045 23,818 20,791 4,756
Non-financial Companies
 Income 9.7 4.3 0.1 6.7
 Expenses 9.3 4.5 -0.6 7.5
 Net profit -2.7 -5.8 11.6 14.6
 PAT margin (%) 2.2 2.1 2.6 6.3
 Net fixed assets 11.6 13.3 15.5 7.3
 Net worth 8.1 7.1 11.0 6.3
 RONW (%) 5.1 4.9 5.4 10.3
 Debt / Equity (times) 1.1 1.1 1.1 0.7
 Interest cover (times) 2.0 1.9 2.0 3.4
 Net working capital cycle (days) 69 67 66 49
 Count of Cos. 19,288 19,270 17,281 3,624
Numbers are net of P&E
Updated on: 04 Dec 2017 11:59AM

Data added for HPI at Assessment prices and HPI at Market prices