Second, lack of an economy-wide measure of the rate of unemployment makes the conduct of monetary policy in India complex. While framing appropriate policy responses to trends in output and inflation, policymakers would like to make some assessment as to whether the economy is operating beyond or short of full employment.
In the absence of comprehensive data on employment, any measure of the natural rate of unemployment (NRU) would be inadequate for policy formulation. Given that only a small part of the Indian labour force, say about ten per cent, is employed in the organised sector and the greater majority is in the unorganised sector, estimation of unemployment is rendered difficult.