The unemployment rate in India has risen to 6.9 percent, the highest in two years, according to a report published by the Centre for Monitoring Indian Economy (CMIE), a business information company headquartered in Mumbai, which first appeared in The Business Standard.
"The unemployment rate rose to 6.9 per cent in October. This is the highest unemployment rate recorded in two years. The unemployment rate has been rising almost steadily since July 2017. And, this is not the only bad news from the labour markets," the report said, while noting that the labour participation rate and the employment rate are a better ways to gauge the labour market.
The labour participation rate, a measure of adults who are willing to work, has fallen to 42.4%, the lowest since January 2016
"Labour participation rate was of the order of 47-48 per cent before demonetization. But, it fell sharply after demonetization and it has still not recovered. We did see this proportion rise in September but that increase was negated in October," the report said.
The employment rate is a measure of the adult population that is employed for compensation.
According to the report, approximately 397 million citizens were employed in October, 2018, which is 2.4 percent lower than the 407 million employed in October, 2018.
"Only 39.5 per cent of the adult population was employed in October. This is the lowest proportion of adult population that is employed," the report said.
Meanwhile, the number of citizens looking for jobs doubled from 14 million in July 2017 to 29.5 million in October 2018. An estimated 21.6 million citizens were looking for jobs in October 2017.
"This is a sharp y-o-y fall in employment. This sharp fall in the employment rate in October is perhaps the most worrisome measure of the labour markets," the report said.
"In a little over a year, the number unemployed has more than doubled. This partly reflects the return of labour to the labour markets after their exodus post demonetization," the report said.
In a statement released on the second anniversary of Modi government's demonetization exercise, former prime minister Manmohan Singh called it "ill-fated and ill-thought."
Singh, a noted economist, said, "It's often said that time is a great healer. But unfortunately, in case of demonetisation, the scars and wounds of demonetisation are only getting more visible with time."
"This has had a direct impact on employment as the economy continues to struggle to create enough new jobs for our youth. The financial markets are volatile as the liquidity crisis wrought by demonetisation is taking its eventual toll on infrastructure lenders and non-bank financial services firms." he said.
Warning the Modi government against further misadventures, Singh said, "Today is a day to remember how economic misadventures can roil the nation for a long time and understand that economic policymaking should be handled with thought and care."