Unemployment has become a highly charged issue in India drawing frequent claims and counterclaims from political rivals. Over the past year, we have witnessed two great shakeups in the Indian economy- Demonetisation and GST. The impact of these two factors needs to be analyzed wrt unemployment rate. The monthly unemployment data tracked by BSE and CMIE is used for this analysis.
Firstly, the data from the states in aggregated into regions: North, South, Central, Eastern, and Western. Only Assam and Tripura are represented in the data from the North East. Thus, their data was aggregated along with the Eastern states to generate the following viz which shows the monthly unemployment rate in India as a whole and its various regions from 2016 and also shows the impact of GST and demonetization.
Clearly, demonetisation did not have a negative impact on unemployment. Instead, unemployment decreased post demonetisation. The introduction of GST seems to have increased unemployment, probably due to loss of jobs in the informal sector.