Former Chief Economic Advisor (CEA) Kaushik Basu on Wednesday urged the government to take corrective measures to deal with rising unemployment in India. He said the latest data from the CMIE - a think tank - showed India's youth unemployment rate had reached the alarming level of 45.4% — among the highest in the world.
"This is doing deep damage," the economist, who teaches economics at Cornell University, said. "For the sake of the country, we must not hide behind slogans, must put politics aside & take corrective measures."
Basu's post evoked a series of comments by social media users including professionals, who contested the data and asked the economist to 'stop misleading'.
Swathi Bellam, a social media user, said unemployment is 45% for the 20-24 age group where most of the people are still studying. "It is a mere 2% for above 30. So it means after education, most of them get a job," Bellam said.
A senior technocrat and software engineer, too, cited the same data and said 45% unemployment is for the age group of 20-24. "And for age 30 and above, it's only 2%. As per the same report you are quoting. Heights of propaganda."
Padmaja, another user, asked Basu to "stop misleading by publishing half-truths". "You are positioning it as if 45.4 % of all youth are unemployed. There is a huge difference. Stop this!"
She said the unemployment rate witnessed a sharp decrease in January 2024. According to the latest data from the Centre for Monitoring the Indian Economy (CMIE), an independent think-tank, the unemployment rate in India stood at 6.8% in January, she added.
"The unemployment rate in India saw a decrease of 1.9% in a month, as it stood at 8.7% in December last year. The Lowest in 16 months. Out of this unemployment in the youth aged between 20 and 24 increased to 44.49 %, which was 43.65 % in the July-September quarter," she said.
Dr Subroto Roy, an economist who holds PhD from Cambridge, doubted the numbers and asked: "Are you serious Kaushik? Have you asked what exactly is being measured or attempted to be measured? is there any movement in wages? did you look to see? never too old to learn."
Earlier this month, Kaushik Basu backed Sam Pitroda's idea of wealth distribution to reduce income inequality. He said the biggest inequalities in life occur at birth. "Some are born abysmally poor, some rich beyond imagination. This has nothing to do with their hard work and has no moral justification. This is the reason why an inheritance tax to curb inequality is a must in any civilized society."
In a tweet on May 16, the professor said that some inequality is understandable as it acts as an incentive and promotes efficiency. But, he said, the level of inequality one sees today is way beyond that and "unacceptably high". "It is also damaging democracy and needs correction."