Modi faces job creation challenge as unemployment rate rises to 6.1%

India's unemployment rate rose to 6.1% in the 2017/18 fiscal year, the statistics ministry said on Friday, presenting a challenge for Prime Minister Narendra Modi to kick-start job creation in his second term in office.

The data, that has been repeatedly delayed, was released a day after Prime Minister Narendra Modi was sworn in for his second term. Indian voters gave him a big mandate in the general election that ended this month despite concerns over jobs and weak farm prices.

"It shows the jobs crisis is still there: there are not many new ones being created," said NR Bhanumurthy, a professor at the National Institute of Public Finance and Policy in New Delhi, regarding the new figure.

Pronab Sen, India's former chief statistician, said that small businesses had been especially weak, while the unemployment rate was likely to have spiked after the country replaced the majority of its banknotes in a shock move in 2016.

The unemployment number comes as another set of data released on Friday showed that the economy grew at 5.8% in the January-March period, its slowest pace in 17 quarters, and falling behind China's pace for the first time in nearly two years.

The 6.1% figure matches data earlier leaked to the Business Standard newspaper in January, that said it was the highest level in at least 45 years.

The paper's report was based on an assessment carried out by the National Sample Survey Office between July 2017 and June 2018.

There has not been detailed official data on unemployment for several years, and on Friday the government declined to provide comparable numbers for the jobless rate.

"It's a new design, new metric," chief statistician Pravin Srivastava told reporters. He did not elaborate.

"It would be unfair to compare it with the past."

The data also showed the continuing gender imbalance in the Indian workforce, that has one of the lowest female participation rates in the world.

The statistics ministry said that the female labour participation rate in urban areas for the quarter ending December 2018 was 19.5%, compared with 73.6% for males.

"It is a long-term issue, to do with social, cultural and religious reasons," Bhanumurthy said. "Any solution needs to come from the ground to tackle these."