Uemployment And Inflation In India

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Unemployment: The unemployment rate in India was last reported at 9.4% in 2009/10 fiscal year (Exhibit 2). From 1983 until 2000, India's Unemployment Rate averaged 7.20% reaching an historical high of 8.30% in December of 1983 and a record low of 5.99% in December of 1994. The Labor force is defined as the number of people employed plus the number unemployed but seeking work. Those who are not looking for work, are institutionalized, or are serving in the military are not considered part of the labor force and therefore are not counted in the unemployment rate. Total population of the country is 1.182 billion as of Dec 2010 with 63.5% in the working age of 15 – 59 years, however not everyone who falls in this age range is interested in joining the work force so the worker-population ratio is much lower. The overall unemployment rate is 9.4%, and it is split out as 10.1% in rural areas, and 7.3% in urban areas. For males, the unemployment rate is 8%, whereas for females the unemployment rate is much higher at 14.6%.4 Inflation: India has had relatively low inflation levels over the past 60 years, with the average over that time being 6.4%. It has also shown a downward trend in each of the previous 3 decades, while showing considerably less volatility over that time as well. However, following the financial crisis in 2008-2009, India has had the highest inflation of any of the emerging markets, reaching into double-digits. It began with increases to food prices, but has since stabilized over all goods and services. Rising wages, and input costs are being passed on from intermediate to intermediate, with the final goods and services bearing these costs to the consumers. This could be a structural issue for India, rather than a cyclical one, as India’s economy has been characterized by supply constraints, shortages of skilled labor, and high expectations. The central
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