Lok Sabha Question No. 403 (UNSTARRED), answered on 2026-02-02
Subject: Unemployment and Inflation
Ministry: FINANCE
Asked by: Shri E T Mohammed Basheer

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF ECONOMIC AFFAIRS

## LOK SABHA UNSTARRED QUESTION NO. 403 TO BE ANSWERED ON 02.02.2026

## UNEMPLOYMENT AND INFLATION

403. SHRI E T Mohammed Basheer

Will the Minister of FINANCE be pleased to state:

- (a) the current trends and causes of unemployment and inflation in the country and the manner in which they are interrelated;
- (b) the policies and regulatory mechanisms introduced by the Government to simultaneously control inflation and generate employment in the country; and
- (c) the manner in which these interventions by the Government help in achieving a balance between price stability and employment growth?

## ANSWER MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY)

(a):  According to the Annual Periodic Labour Force Survey (PLFS) 2023-24 (July to June period), the all-India annual unemployment rate for individuals aged 15 years and above (as per usual status) declined from 6 per cent in 2017-18 to 3.2 per cent in 2023-24. At the same time, the average retail inflation rate (Y-o-Y) measured by the Consumer Price Index (CPI) declined from 5.4 per cent in 2023-24 to 4.6 per cent in 2024-25, the lowest in the last 6 years. It moderated further in 2025-26 (April-December), with average retail inflation easing to 1.7 per cent.

According to economic theory, periods of high unemployment may reduce wage pressures, which consequently can suppress household demand and mitigate inflationary pressures within the  economy.  However,  in  the  Indian  context,  the  interaction  between  unemployment  and inflation rate is shaped by several factors, such as the structural characteristics of the labour markets, supply-side drivers of prices and government interventions to control inflation and generate employment.

(b)  The  Government  has  undertaken  a  series  of  measures  to  control  inflation  and  foster sustainable employment in the economy. The measures to control inflation and stabilise the prices of essential items include building buffers of key food items and periodically releasing these items into the open market; preventing hoarding by setting and revising stock limits; distributing  select  food  items  like  rice,  wheat  flour,  chana,  masur  dal  and  moong  dal  at subsidised  prices  through  designated  retail  outlets  under  the  Bharat  brand  and  periodic reduction in the retail selling prices of domestic LPG. Some recent initiatives aim to strengthen the  pulse  and  edible  oil  markets  in  the  country.  With  ₹42,000  crore  investment  and  1,100 projects  focused  on  modernising  rural  infrastructure,  the  'Pradhan  Mantri  Dhan-Dhaanya Krishi  Yojana'  and  the  'Self-Reliance  in  Pulses  Mission'  were  launched  to  boost  farmers' incomes. The Government has also recently approved a ₹13,890 crore procurement of pulses and oilseeds at the minimum support price in Uttar Pradesh and Gujarat under the PM-ASHA scheme.  A  recent  amendment  notified  by  the  Government  is  the  Vegetable  Oil  Products Production and Availability (Regulation) Amendment Order, 2025, effective since August 01, 2025, which is a crucial step in correcting supply-demand imbalances in the edible oil market.

Further,  the  Government  is  implementing  various  schemes/programmes  to  expand  job opportunities and improve employability. These inter-alia include Prime Minister's Employment Generation Programme, Mahatma Gandhi National Rural Employment Guarantee Scheme (Replaced with the Viksit Bharat - Guarantee for Rozgar and Ajeevika Mission  (Gramin)  Act,  2025),Deendayal  Antyodaya  Yojana-  National  Rural  Livelihoods Mission, Deen Dayal Upadhyaya Grameen Kaushalya Yojana, Rural Self Employment and Training Institutes, Deen Deendayal Antyodaya Yojana-National Urban Livelihoods Mission, PM Street  Vendor's  AtmaNirbhar  Nidhi,  Stand-up  India  Scheme,  Start  Up  India,  Pradhan Mantri  Mudra  Yojana,  Pradhan  Mantri  Kaushal  Vikas  Yojana,  etc.  Details  of  various employment generation schemes/programmes being implemented by the Government can be viewed at https://dge.gov.in/dge/schemes\_programmes.

In addition, the Government has approved the Employment Linked Incentive Scheme, named the Pradhan Mantri Viksit Bharat Rozgar Yojana, to support employment generation, enhance employability, and social security. Further, the Ministry of Labour and Employment is running the National Career Service Portal, which is a one-stop solution for providing career-related services.

(c) The targeted government interventions to control inflation and generate employment, as highlighted in part (b) above, have helped achieve the dual objectives of lower inflation and lower unemployment. The downward trend reflects sustained government efforts to maintain price stability and strengthen labour-market outcomes.  Macroeconomic  reforms,  skill development initiatives, and measures to boost domestic manufacturing have helped create job opportunities and enhanced labour market resilience, while also easing supply-side constraints to mitigate inflationary pressures.

*****