Lok Sabha Question No. 213 (UNSTARRED), answered on 2025-12-01
Subject: Inflation and Unemployment
Ministry: FINANCE
Asked by: Shri E T Mohammed Basheer

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

## LOK SABHA UNSTARRED QUESTION NO. 213

TO BE ANSWERED ON 01.12.2025

## INFLATION AND UNEMPLOYMENT

## 213.  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 create employment; 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-October), with average retail inflation easing to 1.9 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  (PMEGP),  Mahatma  Gandhi  National  Rural  Employment  Guarantee Scheme  (MGNREGS),  Deendayal  Antyodaya  Yojana-  National  Rural  Livelihoods  Mission (DAY-NRLM), Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY), Rural Self Employment  and  Training  Institutes  (RSETIs),  Deen  Deendayal  Antyodaya  Yojana-National Urban  Livelihoods  Mission  (DAY-  NULM),  PM  Street  Vendor's  AtmaNirbhar  Nidhi  (PM SVANidhi), Stand-up India Scheme, Start Up India, Pradhan Mantri Mudra Yojana (PMMY), Pradhan Mantri Kaushal Vikas Yojana (PMKVY),  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  (ELI)  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  (NCS)  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.

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