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The number of jobseekers in India, rising steadily over the last few months, spiked to 7.1% in the week ended Feb. 25.

There are around 31 million unemployed Indians seeking jobs now-the highest since October 2016, according to a report published on Feb. 27 by the Centre for Monitoring Indian Economy (CMIE), a think-tank that tracks business and economic data.

After falling to a low of 3.4% in July 2017, unemployment rates have been rising gradually, the CMIE data show.

"Given that the recent three weeks have consistently shown unemployment rates at close to 7%, it is possible to infer now that the rate is back to the levels just before demonetisation," Mahesh Vyas, CEO of CMIE, said in the report. While the absolute unemployment number isn't alarming, the steady rise is, he added.

Unemployment rates fell for a few months after the note ban in November 2016, as jobseekers sat out of the workforce and focused on acquiring new skills instead of waiting to find jobs in a tough economy.

During that period, the labour participation rate (the total number of people employed or actively hunting for jobs) hovered between 46% and 48% before demonetisation. By July 2017, it fell to below 43%. Now the CMIE expects it to go past 44% by the end of February 2018.

"The labour force has still not recovered entirely, and remonetisation by the Reserve Bank of India (RBI) was not enough to bring labour participation to its earlier levels," Vyas said.

While people are returning to the workforce, there aren't enough jobs around.

"The coming months are not the best for employment," Vyas said. Activity in rural India will slow down after the rabi crop is harvested and won't pick up until the kharif season begins in May, he added.

In addition to the 31 million unemployed as of Feb. 25, urban India will see a spike in demand for jobs as a fresh batch of college graduates enters the workforce in May. But the number of jobs created in financial year 2018 is an estimated 600,000.

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Around 31 million Indians are unemployed, and it will only get worse

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The number of jobseekers in India, rising steadily over the last few months, spiked to 7.1% in the week ended Feb. 25. There are around 31 million unemployed Indians seeking jobs now-the highest since October 2016, according to a report published on Feb. 27 by the Centre for Monitoring Indian Economy (CMIE), a think-tank that tracks...

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Unemployment rate in India at current has been steadily increasing over the months.

Spiked to 7.1% in Feb' 18

31 million unemployed Indians seeking jobs —the highest since October 2016

Unemployment rate to have steeper spike in upcoming months as fresh graduates will seek employment.

Estimated 600,000 jobs to be created in financial sector for year 2018.

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MANILA: India's projected GDP growth of over 7% for the current fiscal is "amazingly fast" and if this momentum is maintained the size of the economy can double within a decade, Asian Development Bank ( ADB) chief economist Yasuyuki Sawada has said.
The country shouldn't worry about not achieving 8% growth but focus on increasing domestic demand by reducing the income inequality, he said.

Growth is driven more by domestic consumption than exports, he added.

The bank has projected India to remain the fastest growing Asian nation with 7.3% growth in 2018-19, and 7.6% in 2019-20.

The Indian economy is forecast to grow at 6.6% in the 2017-18 fiscal ended March 31, slower than 7.1% in 2016-17.

"7% growth is amazingly fast. If a 7% growth continues for 10 years, then that economy's size doubles," Sawada said in an interview with PTI.

"So that's super fast growing growth rate. And being one of the largest economies in the region, achieving this 7.3% this fiscal and next year, 7.6%, is really amazing," he added.

The size of India's economy is about $2.5 trillion currently, making it the sixth largest in the world. Economic Affairs Secretary Subhash Chandra Garg had said recently that the country is on track to doubling the size of its economy to $5 trillion by 2025.

Sawada said however that clocking 8% growth is a "big challenge" for India as of now. "7% growth is a very good number and India should not worry about not achieving 8% growth."

Asked whether export revival would be important for driving the economic growth, he said that half of India's growth is driven by private consumption followed by investment and hence domestic market seems to play a major role in growth.

"Export is not a necessary reading for India growth. Rather domestic market seems to be very important...to support growth rate. Of course, export is one part of growth driver, but Indian growth is driven more by domestic market," he said.

Sawada said inequality and poverty reduction would play a "very important role" in achieving higher growth because consumption can stimulate more production and that can absorb more employment.

He said that poor people, if their livelihood goes up, can be good consumers.

"Tapping the broadening market will be important to achieve higher growth," he said, adding that the services sector too would play a role in pushing up economic growth.

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India's 7% projected growth rate 'amazingly fast', can double economy in 10 years: ADB - Times of India

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MANILA: India's projected GDP growth of over 7% for the current fiscal is "amazingly fast" and if this momentum is maintained the size of the economy can double within a decade, Asian Development Bank ( ADB) chief economist Yasuyuki Sawada has said.The country shouldn't worry about not achieving 8% growth but focus on increasing domestic demand by reducing the income inequality, he said.

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Retail and wholesale prices in India rose in April giving the monetary policy committee more reason to consider a hawkish stance at its meeting next month.

Consumer price inflation stood at 4.58 percent in April, overturning a three month slide from its peak, according to data released by the Central Statistics Office. Economists polled by Bloomberg had expected CPI inflation at 4.41 percent. Wholesale prices in April also touched a four-month high of 3.18 percent due to rising crude oil and food prices.

India's six-member MPC has held benchmark interest rates at 6 percent since June 2017, with a neutral stance, as inflation remained moderate and the growth recovery remained tentative. Now, with confidence in the economic recovery strengthening and inflation rising, the MPC may need to consider a change in stance and an eventual increase in interest rates.

Sticky core inflation - that strips out food and fuel - and the recent surge in crude oil prices could add to the MPC's concerns as it attempts to keep CPI inflation 4(+/-2) percent target. In April, core inflation rose to a 44-month high of 5.9 percent, said Shubhada Rao, chief economist at Yes Bank in a note.

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India CPI Inflation Rises In April Giving Policy Hawks More Firepower

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Retail and wholesale prices in India rose in April giving the monetary policy committee more reason to consider a hawkish stance at its meeting next month. Consumer price inflation stood at 4.58 percent in April, overturning a three month slide from its peak, according to data released by the Central Statistics Office.

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The news article states that there is a increase in india's nominal GDP of over 7%.

the possible reasons for the increase:

The increase in the population causes the demand to increase, hence more goods and services need to be produced.

The increase in GDP could be nominal, the result of  increasing of price of the goods and products which does not means more goods and products are produced.

further analysis

The increase in nominal GDP does not necessarily mean that the standard of living of the population is any better, because the nominal GDP includes the changes in price, and since India is experiencing inflation, it is natural that the nominal GDP will go up, but the poor people living in India cannot afford the increasing prices of the daily necessities which need to be bought, and hence they might actually be suffering. Therefore, higher nominal gdp growth rate does not equate to better standards of living

GDP is not an indicator of the well-being of the population. For example, when an earthquake occurs and requires rebuilding of infrastructure, GDP increases. When someone gets sick and requires to see a doctor, GDP increases. GDP doesn't only calculate the "goods' but also takes into account the "bads".

GDP also doesn't take into account the leisure and entertainment time of people, one country may have an average of up to 12 hours working time, while another country may have an average of 8 hours, but the same GDP. Hence, a higher GDP growth rate doe not mean the well-being of the people is better and we cannot infer that the population has a better standard of living.

Recovery global demand to boost India's GDP growth. as export is also one of the important factors for growth in GDP, the increase in global demands have allowed India to export more of their product to overseas countries. Hence, their net export increase and this might be one of the reason for the increase in India's GDP in start of the 2018.

Furthermore, India's government might implement policies to encourage growth in real GDP by invest in building facilities or infrastructures. this can create more job opportunities for India people. The increase in employment rate could be the reason for increase in GDP as the producing power increase and more goods and services can be produced.

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Concepts that are applicable to our topic:

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Concepts that are applicable to our topic:

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- GDP
- Unemployment
- Inflation

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FireShot Capture 7 - India Inflation Rate I 2012_ - https___tradingeconomics.com_india_inflation-cpi.png

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Reasons for unemployment rate:

Despite the increase in jobs, the gap between existing jobs and unemployed nationals is still very wide due to the large population.

As India is geographically large in size, the distribution of jobs may not be done well. Some parts of India are very rural while some are thriving well alongside with the economy.

Due to inflation, companies will end up spending more on materials and resources which have increased prices. As companies would have to cut back on spending after purchases, it will most likely choose to cut down on the number of employees.

The unemployment rate could be overstated since India does a lot of agricultural farming . A big portion of India raises livestock and grow crops and thus mostly are self-employed. This may not be recorded in when the unemployment rate is calculated.

As India relies a lot on agriculture, seasonal unemployment would occur frequently as crops could only be only harvested and sowed for certain periods of time.

A large portion of India experiences monsoon climate with distinct wet and dry seasons. This adds on to the seasonal unemployment as many jobs would become unavailable, especially when drought occurs.

As India is still a developing country which is advancing in technology, the amount of labor force required would become lesser which results in structural unemployment.

These unemployed workers from technological advancements will eventually end up as frictional unemployment as they are likely to be unable to find a job with their skills and level of education.

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India's inflation rate is at all time high of 4.96% as compared to the previous 3 years.

Causes:
Demand-Pull

With an increasing population, demands for daily necessities(housing, food) coherently increases. Due to inefficient technology, the supply rate tends to remain constant, thus unable to meet the simultaneously increasing demand. The supply is constant but the demand is growing. Demand Pull Inflation is commonly described as "too much money chasing too few goods".

With an growing GDP which coincides with an increase in GDP per capita,  individuals in the country would have more disposable income which results in higher demands in more entitled items. This results in companies increasing their prices for their products as their supply is unable to meet demands.

Cost-Push:

India is not as advanced as they are still a developing country. This results in more labor being used to meet the demands of the people which cause a increases the cost of production.

Rupee Depreciation

When rupee depreciates, the amount of money the Indian government pay for importing goods into the country increases. An example would be oil, in 2017, the price of one barrel of oil in US dollars is 52.51 dollars. and in 2018, the barrel of oil costs 65.63 dollars. As the rupee value is lower, the government would need to spend a larger amount of money to exchange to foreign currencies. Hence, when crude oil is purchased at a higher price, the price of petrol and diesel in India market also goes up. This causes an increased price for transportation of goods, which eventually results in an increase in price for consumption goods.

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GDP:
https://www.firstpost.com/business/india-to-clock-gdp-growth-of-7-7-in-january-march-quarter-says-nomura-report-4468367.html
Inflation:
https://www.bloomberg.com/news/articles/2018-05-14/india-s-ugly-inflation-to-pile-more-misery-on-bond-investors
https://www.businesstimes.com.sg/banking-finance/ugly-india-inflation-puts-central-bank-closer-to-rate-hike
Unemployment:
http://www.business-standard.com/article/economy-policy/around-600-000-jobs-being-created-a-month-in-formal-sector-in-fy18-study-118011601086_1.html
https://www.quora.com/Is-India-still-a-developing-country-Or-is-it-a-developed-country-refusing-to-show-its-true-potential-because-of-the-people-who-run-the-country
https://www.quora.com/Whats-the-reason-for-rising-unemployment-in-India
Others/General
https://www.heritage.org/index/country/india
https://data.worldbank.org/country/india?view=chart

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Price of one barrel of oil in India over the years

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Price of one barrel of oil in India over the years

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Oil Price Shock:

( Refer to above chart)
The prices of oil barrel over the years have shown a steady increase since year 2016, from 40.68 US Dollars per barrel of oil to 65.63 in 2018. The rise of prices in oil gives rise to inflation

Farm Price Shock:

Cost-push inflation can also come about from increase in prices of other raw materials, especially farm products, in economies such as that of India where they are of greater importance. In India when monsoon is not adequate or come very late or when weather conditions are quite unfavourable, they reduce the supply of agricultural products and raise their prices. This is farm price shock causing cost-push inflation.

Import Price Shock: *rupee depreciation*

The depreciation of rupee causes cost-push inflation. Producers have to raise their prices of final products produced by them to keep up with the cost-push inflation. When the Indian rupee depreciates, more rupees are required to buy one US dollar and therefore in terms of rupees, imports become costlier.