EXPLORING THE IMPACT OF ECONOMIC GROWTH AND INFLATION RATE ON UNEMPLOYMENT IN INDIA

Abstract

In India, it has been observed that after the Economic Reforms of 1991, the participation of labor force has increased marginally but the rate of unemployment has remained unchanged which still remains a matter of concern. On the other hand, India has faced the issue of persistent rise in prices which is another major problem. As both these parameters are vital measures of economic growth, this paper attempts to find the correlation between both these variables in the Indian context from the year 1991 to 2019. A. W. Phillips in his theory states that inflation and unemployment have a stable and inverse relationship. The major claim of the theory is that with economic growth comes inflation, which in turn should lead to more jobs and less unemployment. On the basis of Phillips Curve this paper attempts to analyze the effect of economic growth and Inflation on unemployment in India during the time period of 1991 to 2020. The observational findings revealed a negligible association between unemployment, inflation and economic growth in India. KEY WORDS: employment, inflation, economic, growth, problem