Note ban, GST impact on jobs more than numbers

The real impact of demonetisation and the goods and services tax (GST) — two big economic decisions taken by the Narendra Modi-led National Democratic Alliance — on jobs has been much more than what is shown in the headline unemployment rate figures given in the National Sample Survey Office’s (NSSO's) report for 2017-18.

According to the current weekly status (CWS) approach of the NSSO’s periodic labour force survey (LFPS), the unemployment rate stood at 8.9% in 2017-18. In this approach, the activity status of a person is determined on the basis of the reference period of one year.

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The NSSO report has been withheld by the government and is yet to be released officially, according to a report in Business Standard.

The field work of the NSSO survey was done between July 2017 and June 2018. So, according to the CWS approach, people disclosed their employment status to the surveyors during July 2018-June 2018 – months after demonetisation of high-valued currency was announced by the government, in November 2016.

According to the CWS approach, the unemployment rate for females was 9.1% and for males it was 8.8%, the NSSO report showed. This was higher than the unemployment rate in usual status, at 5.7% for females, and 6.2% for males.

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“The figures show the double-whammy effect of demonetisation and the GST on jobs. Taking the CWS approach makes sense as the usual status approach considers 365 days, but the former takes into account the status within seven days and factors in the impact of the government’s major economic decisions,” said Mahesh Vyas, chief executive officer, Centre for Monitoring Indian Economy.

The labour force participation rate (LFPR) for females continued its downward trend in 2017-18 as it stood at 23.3%, sharply down from 31.2% in 2011-12 and 32.6% in 2009-10. The LFPR for males didn’t see much change from the previous years.