The degree to which society can provide employment to those who
seek employment is one of the most important indicators of the well-being
of any society. And therefore, the unemployment rate, which measures
the inability to provide such employment becomes the most important
indicator to measure the health of a modern economy.
The larger the proportion of fruitfully employed labour force
of a population, the greater the well-being of society. A society where
a large proportion of the labour force is employed provides respite from
poverty and vulnerability. It also motivates households to spend more to
improve their quality of life. In doing so, households propel economic
growth and more employment.
An increase in unemployment on the other hand, reduces aggregate
spending power, slows down the economy and most importantly, it increases
the vulnerability of households to deal with economic shocks.
It is therefore not surprising that unemployment rate is
one of the most important lead indicators of an economy. In a rapidly
changing world it is imperative that such an indicator is available
at fast-frequency so that corrective actions can be taken in a timely
India does not have a fast-frequency measure of the unemployment rate.
BSE and CMIE have joined hands to produce this vitally important
indicator for India. These private companies have joined hands to produce
a public good. The rate of unemployment in India estimated by BSE and
CMIE is for free public consumption by all.
This joint effort will produce a 30-day moving average measure
of the unemployment rate in India, every day and a monthly unemployment
rate at the end of every month.
This is the first instance of private agencies producing an
unemployment measure for any country in the world. This is also the first
instance of the generation of fast-frequency measure of unemployment.
Introduction of a reliable measure of the unemployment rate would help
the domestic and global financial markets understand India’s economic
health better than it is understood in the absence of such a measure.
Our motivation is to enlighten with the help of reliable data. We hope
our measures will help policy makers, investors, entrepreneurs, academia,
the media and the public at large.