The Hindu Business Line : Unemployment rate up at 9.1 pc

THE Planning Commission has estimated that the unemployment rate for the economy as a whole has shot up significantly in the last two years — up from 8.87 per cent in 2001-02 to 9.11 per cent in 2004-05. An even more disturbing picture that has emerged is that employment in the organised sector has declined between 2001 and 2003 in both the public and the private sectors.

In other words, while employment may be increasing in the unorganised sector in response to the overall growth in the economy, there is actually a contraction in employment in the organised sector. This means fewer jobs for the youth who are the new entrants to the labour force since the organised sector is their preferred sector for employment.

Alongside the increasing unemployment rate is the rising trend in income inequality. While there are no measures of income inequality based on reliable income surveys, the Commission found the per capita agricultural GDP (gross domestic product) had declined although the overall per capita GDP had increased at the rate of five per cent per annum.

Another feature of recent developments having a bearing on inequality was that the organised sector had reported large increases in profits (operating surpluses) and increased wages and salaries for those employed here. At the same time, the per capita income growth was much less than the average among the self-employed in the unorganised sector and negative among employees in agriculture. "This would not be a problem if the size of the organised sector was expanding but that does not seem to be the case, given the employment trends," the Commission has said in a report to be presented to the Government soon.

The report also confirms the apprehensions about apparent regional imbalances. Several studies are available which show that inter-State inequality increased in the 1990s as only some States were able to benefit from the economic reforms and increase their growth rates significantly. While it is not true that only the richest States benefited the most, it is also correct that some of the poorest and most populous States did experience decelerating growth.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Unemployment rate up at 9.1 pc — Fewer jobs in organised sector

Drug cos pull up socks to stay in race

RBI, Finance Ministry to discuss market access of loans with States

Bollywood breaks financing tradition — Study finds sharp rise in private equity, dip in institutional lending

Benchmarks may move around current levels

Regulator facing staff crunch — Ministry shoots down TRAI proposal on funding