Thursday, 10 Oct, 2024
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With differing reports and analyses, India seems to be either experiencing a job surge or facing an employment crisis. The reality likely falls somewhere in the middle, as the data reveals a complex and often contradictory picture.
India must generate an additional 14.8 crore jobs by 2030 to keep up with its rapidly growing population, according to Gita Gopinath, the first deputy managing director of the International Monetary Fund. Last week, speaking at the Diamond Jubilee event of the Delhi School of Economics, Gopinath highlighted that despite robust economic growth, India has fallen behind other G20 nations in terms of employment generation.
Over the past decade, India's economy grew at an average rate of 6.6 per cent, yet the employment rate remained sluggish, below 2 per cent, Gopinath noted. She emphasised that this rate is significantly lower than that of other G20 countries. "With India's population projected to grow significantly, the country will need to generate between 60 million and 148 million new jobs by 2030," she stated. "The clock is ticking — it's already 2024, and the task ahead is formidable."
To tackle this challenge, Gopinath underscored the importance of sweeping reforms, particularly in the land and labour markets. She also highlighted the critical need for a substantial boost in private investment, pointing out that it has lagged behind despite the country's 7 per cent GDP growth.
With varying reports and diagnoses emerging, India appears to be either undergoing a job boom or grappling with an employment crisis. The truth likely lies somewhere in between, though the data presents a complex and contradictory narrative. Recent data from the Reserve Bank of India's KLEMS database indicates that India created 4.7 crore new jobs in the fiscal year 2023-24, averaging 38 lakh jobs per month. This marks the highest annual job creation in over forty years. However, the data is provisional and lacks a detailed sector-wise breakdown, raising concerns about its overall accuracy.
(Data KLEMS 7 PLFS)
According to the Reserve Bank of India (RBI) KLEMS data, approximately 4.6 crore new jobs were created in FY 2023-2024, marking a 6 per cent increase in employment opportunities. Union Minister Piyush Goyal last month hailed this as a historic milestone, stating, “For the first time since 1981-82, the number of new employment opportunities was about 2.5 times higher last year. Over 4.60 crore people gained new employment, representing an increase of around 6 per cent.”
The government’s statement addressed concerns from a recent Citigroup report about India’s job creation capacity. Citing data from the Periodic Labour Force Survey (PLFS) and RBI’s KLEMS, it noted that India added over 8 crore jobs between 2017-18 and 2021-22, averaging more than 2 crore jobs annually.
Additionally, the government highlighted a surge in formal sector employment, with Employees’ Provident Fund Organisation (EPFO) data showing over 1.3 crore new subscribers in 2023-24, a marked increase from the 61.12 lakh new subscribers in 2018-19.
Furthermore, the statement stressed that official data sources, including PLFS, RBI, and EPFO, show consistent improvements in key labour market indicators. These include rises in the Labour Force Participation Rate (LFPR) and Worker Population Ratio (WPR), as well as a decrease in the unemployment rate over the past five years. Also, EPFO and NPS data support these positive employment trends.
Notably, the PLFS presents conflicting numbers compared to KLEMS. While KLEMS reported 1.9 crore new jobs for 2022-23, the PLFS cited 4.1 crore, revealing a discrepancy of 2.2 crore jobs. These differences in reported figures contribute to the ongoing confusion surrounding employment statistics.
The quantity of jobs is only one aspect of the employment narrative. Job quality, including stability, duration, and pay, remains a critical concern. In India, a significant portion of the workforce is self-employed or engaged in informal employment, making it challenging to assess job quality, as mentioned in a Times of India report.
Annual employment is categorised into two main types: 'Principal Status' and 'Subsidiary Status'. An individual is designated as 'Principal Status' if they were engaged in employment for a significant part of the year leading up to the survey. Those who worked for a minimum of 30 days within this period are classified under 'Subsidiary Status'. It is not unusual for individuals to hold multiple jobs throughout the year. This data is compiled annually via the PLFS, with reports for the July-June fiscal year generally released in October. The most recent report available covers the period from July 2022 to June 2023.
The Current Weekly Status categorises individuals as employed if they worked at least one hour on any day during the week prior to the survey. This data is reported annually for both rural and urban areas, with separate quarterly reports specifically addressing urban employment. The latest quarterly report, for January-March 2024, was released in May 2024.
