<p>While high unemployment rates have become the norm in the country, the continuing and steady rise in the rates should cause serious concern. The latest data from the Centre for Monitoring Indian Economy (CMIE) show that the unemployment rate rose to 7.78% in February from 7.16% in January. Though there was a slight decline in the urban areas, there was a sharp rise in rural unemployment, from 5.97% to 7.37%. The increase reflected the slowdown in the economy, which has continued for many quarters. The economy grew more slowly in the last quarter of 2019 than at any time in the last six years. The current unemployment rate is the highest in the last 45 years, and unemployment among the youth is more than the overall rate. It should be noted that a large proportion of even the employed workers are actually underemployed and get low wages.</p>.<p>The main reasons for unemployment in the urban areas is the slackness in the industrial sector, low government spending, the decline in infrastructure and construction activities and the weakening of small and medium enterprises. It can be addressed only with effective action in all these areas, but this was not forthcoming even in the last Union budget. Rural distress has been rising and small and marginal farmers and the landless poor have been particularly hit. Though the government has persistently denied it, the reality is that the rural economy has not yet recovered from the impact of demonetisation. Though there are employment generation schemes and attempts to infuse money into the rural economy through cash transfers, etc., they have not shown any significant result. Such infusions should be on a bigger scale and the pace should be faster. The best options are an increase in disbursements through the PM-Kisan scheme and MNREGA and more spending on irrigation and rural infrastructure. When income from employment and agriculture-related activities goes down, demand for goods and services falls and that affects the overall economy. </p>.<p>The lack of effective policies and action in these areas has given rise to doubts whether improving the economy is a matter of priority at all for the government. Former Reserve Bank governor Raghuram Rajan recently expressed the view that promoting its social and political agenda seemed to be more important for the Modi government. The coronavirus outbreak could further decelerate the economy now. But the government does not seem to show the seriousness that the situation demands. The promise of creating over 20 million jobs every year is not heard any more. The least that can be done is to fill up the over 20 lakh vacancies in government departments at the earliest. </p>
<p>While high unemployment rates have become the norm in the country, the continuing and steady rise in the rates should cause serious concern. The latest data from the Centre for Monitoring Indian Economy (CMIE) show that the unemployment rate rose to 7.78% in February from 7.16% in January. Though there was a slight decline in the urban areas, there was a sharp rise in rural unemployment, from 5.97% to 7.37%. The increase reflected the slowdown in the economy, which has continued for many quarters. The economy grew more slowly in the last quarter of 2019 than at any time in the last six years. The current unemployment rate is the highest in the last 45 years, and unemployment among the youth is more than the overall rate. It should be noted that a large proportion of even the employed workers are actually underemployed and get low wages.</p>.<p>The main reasons for unemployment in the urban areas is the slackness in the industrial sector, low government spending, the decline in infrastructure and construction activities and the weakening of small and medium enterprises. It can be addressed only with effective action in all these areas, but this was not forthcoming even in the last Union budget. Rural distress has been rising and small and marginal farmers and the landless poor have been particularly hit. Though the government has persistently denied it, the reality is that the rural economy has not yet recovered from the impact of demonetisation. Though there are employment generation schemes and attempts to infuse money into the rural economy through cash transfers, etc., they have not shown any significant result. Such infusions should be on a bigger scale and the pace should be faster. The best options are an increase in disbursements through the PM-Kisan scheme and MNREGA and more spending on irrigation and rural infrastructure. When income from employment and agriculture-related activities goes down, demand for goods and services falls and that affects the overall economy. </p>.<p>The lack of effective policies and action in these areas has given rise to doubts whether improving the economy is a matter of priority at all for the government. Former Reserve Bank governor Raghuram Rajan recently expressed the view that promoting its social and political agenda seemed to be more important for the Modi government. The coronavirus outbreak could further decelerate the economy now. But the government does not seem to show the seriousness that the situation demands. The promise of creating over 20 million jobs every year is not heard any more. The least that can be done is to fill up the over 20 lakh vacancies in government departments at the earliest. </p>
