Time for Another Guarantee Act

This piece of bad news is actually good news for the powers that be.

As the UPA government works to counter spiralling inflation, the latest data from the National Sample Survey Organisation indicates another problem on hand that won’t show up in the upcoming Economic Survey — rising unemployment in large pockets of urban India for both men and women…. unemployment among men has gone up from 7.3 per cent in 1999-2000 to 7.4 per cent in 2004-05. While, overall, this is only a marginal increase, the statistics are grim for several Class I cities (population of 1 million and above). The only good news is from Mumbai (down from 8.5 per cent to 7.5 per cent), Bangalore (from 4.2 per cent to 4 per cent) and Chennai (down from 9.2 per cent to 6.4 per cent).

However, unemployment has surged in a whole set of Class I cities: Patna (up from 7.3 per cent to 13.7 per cent), Vadodara (up from 5.5 per cent to 10.9 per cent), Jaipur (double from 3.6 per cent to 7.2 per cent), Delhi (up from 3.2 per cent to 5.3 per cent), Ahmedabad (from 2.6 per cent to 5.3 per cent), Kolkata (up from 7 per cent to 8.1 per cent) and Pune (up from 4.5 per cent to 8.5 per cent).

I’m not well-read in Economics but some questions persist: does this news have anything to do with the steadily-increasing inflation? And does the recent increase in CRR augur ill for business?

This couldn’t have come at a better time. Budget is right round the corner. Don’t tell me I didn’t warn you: expect a new Bill tentatively titled National Urban Employment Guarantee Scheme complete with the mandatory quota requirements.

Related Reading: The National Rural Employment Guarantee Scheme by Atanu Dey (highly recommended).

What solutions do the socialist bloggers propose to counter this? Dole Subsidies should be a good start… Dilip D’Souza should stop his current US tour midway and undertake another Sleeper Class train journey throughout the length and breadth of India.

3 comments for “Time for Another Guarantee Act

  1. February 17, 2007 at 10:54 PM

    Also, from what little I know about economics, increased unemployment could be due to any number of factors – increased migration of people into cities, just cyclical nature of some industries (housing doesn’t seem to be slowing down with higher interest rates, at least in bigger cities), or more people may be coming into the job market after graduating from high school and college. CRR increase or interest rate increase have longer lag effect, but could certainly impact some businesses due to higher cost of credit and hence less hiring.

    There was an op-ed in IE on 17th that said unemployment is highest for 17-25 group – so another factor could be that these guys may not be taking up work because they are looking (or waiting) for better paying jobs.

  2. February 17, 2007 at 10:43 PM

    Agree with JK. It’s so streched out that I can’t see letters to the left.

  3. JK
    February 16, 2007 at 11:14 PM

    Off Topic: This theme is bad. Please switch back to one of the old themes :)

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