Unemployment Figures INDIA...

Income is a nominal measure of employment activity, the real measure of economic activity, and, i think INDIA is doing a good job as far as level of unemployment is concerned. Many say that data on unemployment is not dependable because 90% of the market is unorganized and we do not have actual data, but the usage of figures, quiet frequent, in analyses lends some credibility to those figures, at some places 2.2% for the year 2012 and at other 3.8% for the same year. At best i expect it to be around 5% close to frictional unemployment. If it is below 5% it is a sign of overheating. That’s why inflation is so persistent, above 10 % in 20 years out of the 30 years since 1980s. We only find inflation subdued below 5% during period starting 1999 to 2004. But inflation increased because of rise in fiscal spending after the period 2004-05 because of stringent supply conditions. It remained above 10% after that period. On unemployment front the rate was 2.3% during the same period. To sum up, we can say that the economy is generating enough jobs and is adding more people to the workforce every year, but that is true as far as jobs in public sector through MNREGA is concerned. In the private sector wages are increasing more than public sector which means public sector is crowding out investment and employment in the private sector…