Controversy struck after two members of the National Statistical Commission (NSC) - including the acting chairman - resigned earlier this week, suggesting that the report wasn't being released despite its approval.
The report also says youth unemployment is at "astronomically high" levels of 13 to 27 per cent.
The leaked report further said that unemployment was higher in urban areas (7.8 per cent) as compared to 5.3 per cent in rural areas.
The government did not confirm the contents of the NSSO report but said it felt that the report doesn't present an accurate comparative picture. That was the highest since 1972-73, the period since when jobs data are comparable. And critics say the government's claims of economic success have sounded increasingly hollow.
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"The Niti Aayog analysis shows that we are creating 7-8 million jobs".
After reports of the resignation in the media, the government on Wednesday said the two NSC members had not expressed their concerns in any of the meetings of the Commission in the last few months. I am certain, jobless growth is what we are witnessing now.
Earlier this week, P C Mohanan, a career statistician, and J V Meenakshi, Professor at the Delhi School of Economics, resigned from NSC citing the delay in release of the PLFS report as one of the reasons.
The data is significant because this was the first comprehensive assessment of India's employment situation conducted after Modi's decision in November 2016 to withdraw most of the country's banknotes from circulation overnight, the report said.
After the chaotic launch of Goods and Services Tax (GST) in July 2017, hundreds of thousands have lost jobs in small businesses.
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This is the same stance the government adopted when GDP back-series data was released by a sub-committee of the National Statistical Commission (NSC) previous year. Without mentioning the Opposition party, he said there has been a confusion spearheaded by those using employment report which has been pervaded but has not been finalised.
The gloomy jobs data could be awkward for PM Modi's government to explain with a general election looming and opinion polls already showing the ruling Bharatiya Janata Party unlikely to keep its parliamentary majority.
"It's a very, very serious issue, and that is the why the government didn't want this data to come out in the public domain", said former Finance Minister Yashwant Sinha. "They will definitely find a place in this budget, like agriculture, employment and the middle class".
The Niti Aayog is of the view that high growth can not take place without a rise in employment as there has been a decline in private investment and no significant improvement in productivity.
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