UNEMPLOYMENT RATE

Recent figures in news

• During January-March 2023, the unemployment rate for those in the age group of 15-29 years stood at 17.3 per cent in urban areas, as per the periodic labour force survey. Among males it was estimated at 15.6 per cent, while for females it was pegged to be higher at 22.9 per cent.

Trends under Employment Guarantee Scheme

• Despite the economy growing at a steady rate, more numbers of individuals and households are opting for work under the rural employment guarantee schemes.
• In June this year, the number of household willing to avail work under the employment guarantee scheme crossed the 3 crore mark. Showing a 10% increase in comparison to the last year’s levels.
• This is only the third time since April of 2014, that the number of households wanting to work under the scheme has crossed the 3 crore mark in a given month.
• The demand for work under the scheme witnessed a steep rise during the years of covid-19 Pandemic. Touching 11.19 crore in 2020-21 and 10.61 crore in 2021-22.
• Post-pandemic it declined to 8.76 crore in 2022-23 but still fared above the pre-pandemic levels. This denotes that a trend is setting where more individuals are looking for work under employment guarantee scheme.
• In the year 2022-2023, the average wage rate per person per day under the scheme increased to Rs. 233 from Rs. 218.
• Earnings of casual labour, engaged in works other than public works, were Rs 368 during April-June 2022 as per the periodic labour force survey.

Causes and effects of this change

• One of the more prominent causes identified behind this change is the uneven pattern on rainfall seen during this kharif season.
• There is also a steady rise seen in the number of individuals seeking and availing work under the scheme over the years. This can be a worrying sign for the future though.
• There is palpable stress noticed in the urban areas as well, regarding the growing unemployment and recuing work opportunities for individuals.
• A possible impact of this trend is also visible in the banking sector. That has experienced a rise in impairments and defaults in credit card receivables. Bad loans have also increased from the last year levels.
• Even though retail category loans were low, Special Mention Accounts with principal or interest payment overdue were as high as 7.4%.

Conclusion

• Analysis of the above-mentioned trends and pattern points towards the fact that the avenues available for productive forms of employment in rural areas are dwindling.
• The Unemployment rate even though has diminished from the high levels reached during the pandemic period but is still very high among the youth of the country. It is this particular section that is rapidly moving towards the unemployed category.
• Hence, there is a need to understand the causes that has led to this situation. The government needs to work towards bringing youth into the labour force by providing them access to safe and secure employment.
• For this, the role played by Civil Society Organisations need to be rethought. They can help in gathering information from the ground level about what kind of work people are looking for and what kind of expectations they have from it.
• Finally, the most important step that need to be taken is to improve the level of monitoring. That includes gauging these trends and pattern changes and making necessary adjustments to the policy actions. Only then the government would be able to maintain a stable rate of unemployment in the country.