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Unemployment rate grows
Why is it in the news?
- The estimated unemployment rate shot to a 27-month high of 7.38% in December 2018 and numbers of those employed fell by 1.09 crore over the last 12 months.
- These estimates are provided by Centre for Monitoring Indian Economy (CMIE) report based on database from over 1,58,000 households.
More in the news
- The CMIE data shows that alongside the rise in unemployment, there has been a dip in the labour participation rate.
- The unemployment rate in December 2018 shot up to 7.38% from 6.62% in November 2018 and 4.78% in December 2017.
- This is also the highest unemployment rate since September 2016 when it stood at a high of 8.46 per cent.
- A closer look at the numbers show that a large part of the drop in employment over the last 12-months is on account of job losses in rural areas.
- Of the total drop of 1.09 crore jobs in calendar 2018, 91.4 lakh or over 83% of the jobs were lost in the rural areas, shows the database.
- Labour Participation Rate:
- According to the CMIE data, the estimated labour participation rate came down to 42.47 in December 2018 from 43.57 in December 2017.
- It however, stood at 45.15 in December 2016 and at 47.84 in September 2017.
- The LPR tells us how many people are willing to work.
- As high LPR directly contributes to growth, if a very small proportion of people are willing to work then a low unemployment rate does not mean much.
Centre for Monitoring Indian Economy
- Centre for Monitoring Indian Economy, is a leading business information company. It was established in 1976, primarily as an independent think tank.
- CMIE has a presence over the entire information food-chain - from large scale primary data collection and information product development through analytics and forecasting.
- It provides services to the entire spectrum of business information consumers including governments, academia, financial markets, business enterprises, professionals and media.
- CMIE is a privately owned and professionally managed company head-quartered at Mumbai.
Source
Indian Express, CMIE.