Status Report on Urban Unemployment for Indian States

In November, 2019, the Ministry of Statistics and Programme Implementation came out with the quarterly bulletin on Urban unemployment scenario in India for the fourth quarter (January to March, 2019) of FY 18-19. The report gave a holistic view of all the four quarters of FY18-19. The report has considered the Current Weekly Status definition for labour force participation rates ( LFPR) and unemployment rates (UR). The Current Weekly Status (CWS) of a person is the activity status pursued during a reference period of seven days preceding the date of survey.

Source: MOSPI

The unemployment rate has seen a decline from 9.7% in Q1, 2018-19 to 9.2% in Q4, 2018-19. Nine percent itself represents a high unemployment rate. In terms of labour force participation rate it seen that while LFPR has increased in Q4, 2018-19 as compared to Q1, 2018-19, there is a decline when compared to Q3, 2018-19. It is also worth mentioning that the unemployment rate was as high as 9.7% in Q3, 2018-19. The decline in unemployment rate in Q4, 2018-19 also comes with a decline in LFPR in Q3, 2018-19. So the decline can be partially due to lesser people seeking job. Similar trend is reflected for both male and female.

Source: MOSPI
Source: MOSPI

Similar trend is reflected when we consider only people in the age group of 15-29. But the alarming picture here is unemployment rate is as high as 22.5%. The same is 29% for female and almost 21% for male. This is a very high number considering the demographic distribution of India. Majority of Indian population lies in this age. Moreover the decline in workforce participation rate consistently for female in this age group remains a concern.

Source: MOSPI

IPD considers a index which is LFPR/Unemployment Rate, to measure the performance of the Indian states. Higher the value of the index, better is the situation in that state. Let us first consider people in the 15-29 age group.

Source: MOSPI

Gujarat, Karnataka and Punjab are the top three states in terms of the constructed index. Also they have the lowest unemployment rate. In terms of LFPR, Punjab has the highest ranking followed by Tamil Nadu and Gujarat. When we look into the improvement in the index value in Q4, 2018-19 as compared to Q1, 2018-19, the top three states are Jharkhand, Maharashtra and Karnataka. While Jharkhand as one of the worst ranks in terms of overall index value, there is a sign of improvement.

Source: MOSPI

When we consider people from the all age group, it is seen that while Gujarat, Karnataka and West Bengal has the top three ranks, Odhisa, Bihar and Uttar Pradesh has the worst three ranks. In terms of improvements, Jharkhand, Karnataka and Kerala has the highest three ranks. The worrisome situation is in Odhisa. It is one of the bottom ranked states in terms of index value and also the last ranked state in terms of improvement percentage. It has seen a significant decline in index value. This remains a cause of concern.

As we are heading for the budget this year in a month, unemployment still remains a big concern area with rates over 9% for the entire population and over 22% for people in the age group of 15-29. IPD hopes more focus is given to people intensive sectors and we would see some moves in this direction in the budget hopefully.

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