Data debunk jobless growth theory

Unemployment rate falls to 2% in 2009-10 from 2.3% in 2004-05.

The government today said the country’s unemployment rate fell to 2 per cent in 2009-10 (July-June period) from 2.3 per cent in 2004-05, dispelling fears of jobless growth.

According to data released by the National Sample Survey Office (NSSO), 20 people per labour force of 1,000 were unemployed in 2009-10. In 2004-05, the figure was 23.

However, India’s data, based on a sample survey, is not strictly comparable with figures from the advanced countries. This is because India has a large number of self-employed people. This includes disguised employment in the farm sector, too. So, the US unemployment rate of 9.5 per cent in July 2010 cannot be compared with this data.

“We should be cautious about interpreting this data with that of the advanced countries. We have more self-employed people,” Chief Statistician TCA Anant told Business Standard. He, however, added that comparing the data for the two periods gave a clear picture of the changes in the economy.

A total of 51 per cent workers were self-employed in 2009-10. While the number of unemployed people in relation to the labour force fell 13.04 per cent, the economy grew at a much faster rate of 51.23 per cent during the period.

“This is because manufacturing has not grown faster,” said Crisil Chief Economist D K Joshi.

Though manufacturing grew over 57 per cent, slightly faster than the economy, it should have grown faster to absorb more labour force, said economists.

In rural areas, the unemployment rate fell marginally from 1.7 per cent to 1.6 per cent, while in urban areas, the reduction was from 4.5 per cent to 3.4 per cent

If taken as a proportion of the population, India’s unemployment rate declined to 8 per 1,000 people from 12 per 1,000 people.

The government’s economic policies, particularly after liberalisation in 1991, have drawn flak from certain quarters on the ground that the high growth triggered by economic reforms is not generating enough jobs.

“I don’t think so (that the growth has been jobless). The government has taken several key initiatives, including the job scheme. The data show that we are moving in the right direction, though we need to step up efforts,” said Anis Chakravarty, director, Deloitte Haskins & Sells. There are some worrying areas too. “The female labour force per 1,000 population declined to 233 during 2009-10 from 294 during 2004-05,” said the NSSO report.

“The participation of women in the labour force has come down, while that of men has been more or less maintained. It is a worrying sign,” said Crisil’s Joshi.

The labour force has been taken as 468 million for 2009-10, more or less same as in 2004-05. This is despite the country’s population increasing from 1,090 million to 1,170 million during the period.Labour force comprises people who are employed and those willing to work. Workforce is the people employed.