Friday, 17 May, 2024
By: Anshul Vipat
The fall in the unemployment rate was achieved along with an increase in the labour participation rate (LPR). Image source: IANS
The numbers indicate there is an upward trend that could possibly be deepened by government policies aimed at creating new jobs
India's formal and informal job sector is showing growth and resilience after surviving the COVID-19 pandemic and slackness brought about by global slowdown due to Russia-Ukraine war. India’s unemployment rate fell further from 6.4 per cent in September 2022 as per the recent study conducted by Centre for Monitoring Economy. As per the think tank report, the fall in the unemployment rate was achieved along with an increase in the labour participation rate (LPR).
One more interesting aspect of the data is increase in employment rates in rural and a rapid fall in urban sectors. According to CMIE, rural labour participation rate improved by 0.29 percentage points. It rose from 40.39 per cent in August to 40.68 per cent. In June 2022, the rural LPR had fallen below 40 per cent for the first time since the pandemic stricken month of April 2020. It has recovered in each month since then and the performance in September indicates a continuation of that process. The rural unemployment rate fell by 1.84 percentage points from 7.68 per cent in August to 5.84 per cent in September. In contrast, unemployment in urban areas increased by almost 2 percent - from in September 9.57 per cent in August to 7.7 per cent in September 2022.
There was also a substantial churn in jobs in September. Agriculture, which contributes more than 10% to the GDP shed an alarming million jobs in September. Urban industries, on the other hand, shed 0.56 million jobs. Major job creators for this month were construction, labour, retail trade and tourism. CMIE data also had an important figure - total rural employment in industry crossed 76 million. This is its highest level since the pre-pandemic rural industrial employment level of 79 million in January 2020.
While these numbers cannot be described as a sea change in employment situation, it does indicate there is an upward trend that could possibly be deepened by government policies aimed at creating new jobs. In June, the government announced a drive to recruit 10 lakh people in a mission mode in the next 1.5 years. The big bang recruitment drive means Union government departments and ministries would add a third of their workforce in just one and a half years. It will include the recently-launched Agnipath scheme - a short service commission proposal for the armed forces which will take in youth between the age of 17.5 to 21 years on an annual basis for four-year duration. This alone is expected to create more than 45,000 jobs in a year.
Meanwhile, in private sector, employers are reporting the most optimistic hiring outlook in eight years. Job creation is likely to see a boost in the last quarter of this year.
Let’s not forget, Prime Minister Modi came to power in 2014 with the promise of creating 2 crore jobs in the country, a promise that largely remains unfulfilled. Unemployment has emerged as one of the major challenges before the Modi government and remains a sore point in the economy, especially in the wake of Covid-19.
