Unemployment falls in UP, on the rise in Punjab and Goa, shows data

PLFS data also shows Uttarakhand and Punjab's poor performance between 2017-18 and 2019-20

Unemployment is an area where all political parties target the incumbent in the election season. While Covid has certainly disrupted employment, a Business Standard analysis shows that in Uttar Pradesh, unemployment has decreased over the five years. In contrast, Uttarakhand, Goa and Punjab have witnessed an increase.

CMIE’s quarterly statistics show that Uttar Pradesh’s unemployment rate in the September-December quarter was 4.83 per cent. Five years ago, between September and December 2016, the state had witnessed an unemployment rate of 8 per cent. Unemployment in Punjab increased from 6.13 to 7.85 per cent during this period. Goa witnessed an increase from 12.85 per cent to 13.09 per cent. Uttarakhand’s unemployment rate went up from 2.3 per cent to 4.08 per cent. For the nation, CMIE data shows an increase in unemployment from 6.68 per cent to 7.1 per cent.

An overall analysis of 24 states and UTs shows a mixed bag performance, wherein while 13 states witnessed a fall in the unemployment rate during this period, 11 saw an increase. Rajasthan has been the worst-performing state, followed by Haryana and Jharkhand. The unemployment rate in Rajasthan between September-December 2016 and the same period in 2021 increased 19 percentage points from 5 per cent to 24 per cent. Haryana, which has the highest unemployment rate in the country, recorded a 17 percentage point jump in this period.

But, another factor to consider is the falling labour force participation rate. The CMIE data shows that the labour force participation rate has declined, barring only four states — Rajasthan, Assam, Jharkhand and Meghalaya — that witnessed an increase in labour force participation rate in the last five years.

In absolute terms, Uttarakhand was the worst performer among the four states, recording a 55 per cent increase in the number of unemployed persons looking for work. While the absolute labour force in UP declined by 6 per cent in the third quarter of 2016-17 compared to the third quarter of 2021-22, the decrease in the number of unemployed persons looking for work was a stark 43 per cent. In Goa, the absolute number of unemployed looking for work declined 25 per cent, but the labour force witnessed a faster decline (30 per cent). Ten of 24 states (Punjab and Uttarakhand among them) saw an increase in the number of unemployed persons looking for work during this period.

Data from the Periodic Labour Force Survey shows similar results between 2017-18 and 2019-20. Data from annual PLFS reports, which measure employment between July and June, shows that between 2017-18 and 2019-20, Uttar Pradesh, Goa and Manipur were part of states where unemployment decreased. In contrast, Punjab and Uttarakhand witnessed an increase in the unemployment rate by 1.6 per cent and 2.3 per cent, respectively. For India, the rise in unemployment during this period was 0.1 per cent, as per PLFS data.

Analysis of quarterly PLFS reports for unemployment in rural areas shows similar trends. However, they also indicate Punjab has a lower urban unemployment rate for the three quarters between July 2020 and March 2021 than Uttar Pradesh. They also exhibit a rise in unemployment across all election headed states compared to 2019-20.