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Rate of unemployment in India highest in 20 years: Report

The biggest new challenge facing India's policymakers and administrators is rapidly rising unemployment, says a report released recently by the Centre for Sustainable Employment of the Azim Premji University.

"Unemployment levels have been steadily rising, and after several years of staying around 2-3%, the headline rate of unemployment reached 5% in 2015, with youth unemployment being a very high 16%," the State of Working India 2018 (SWI) report said. "This rate of unemployment is the highest seen in India in at least the last 20 years," the report added.

This shortage of jobs is compounded by depressed wages, with 82% of men and 92% of women earning less than Rs 10,000 per month.

The report also notes that the growth in Gross Domestic Product (GDP) hasn't resulted in a commensurate increase in employment.

The report calls rising unemployment a "new" problem for India.

"It used to be said that India's problem is not unemployment but underemployment and low wages. But a new feature of the economy is a high rate of open unemployment, which is now over five percent overall, and a much higher 16%t for the youth and the higher educated. The increase in unemployment is clearly visible all across India, but is particularly severe in the northern states," it says. States such as Chhattisgarh, Gujarat and Karnataka are exceptions to the trend of rising unemployment nationally.

Amit Basole, associate professor of economics at Azim Premji University and one of the authors of the study, said that the nature of India's job market has changed as more educated people enter it.

Another significant trend that the report highlights is the problem of low earnings. "Nationally, 67% of households reported monthly earnings of up to Rs 10,000 in 2015. In comparison, the minimum salary recommended by the Seventh Central Pay Commission (CPC) is Rs 18,000 per month. This suggests that a large majority of Indians are not being paid what may be termed a living wage, and it explains the intense hunger for government jobs," the report observes. Worryingly, it adds that 90% of industries even in the organised manufacturing sector "pay wages below the CPC minimum. The situation is worse in the unorganised sector".