Mint Quick Edit | India’s unemployment edges up—but job quality is the real challenge
India’s unemployment rate rose a bit this January to 5.0% from 4.8% in December, as seen in the monthly bulletin of the government’s Periodic Labour Force Survey (PLFS) released on Monday.
A tracker by the private Centre for Monitoring Indian Economy (CMIE) also shows a modest rise in joblessness to 7.3% last month from its previous month’s reading of 7.1%.
The CMIE’s, based on a panel feed, runs a 30-day rolling average (to smoothen its trend) and uses a stricter definition of being employed—which helps explain the gap. While CMIE looks at what its sample did over the past day, the PLFS checks “weekly status.”
However, neither figure captures job quality. India’s vast informal economy means that being employed is mostly not about being on payrolls; or even being productive, as often seen in the farm sector.
Our productivity slack translates to a weak link between the labour market and inflation, as there’s no all-India “wage push” to speak of. So, unlike the US, whose central bank’s mandate is to balance price stability with employment, our data on jobs doesn’t affect monetary policy; its other objective is economic growth. It’s job quality, though, that people care about.
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