The Great Jobs Hunt

26-08-2023

11:36 AM

1 min read

Prelims: Indian Economy

Why in News?

The article highlights the need for a better quality of economic growth and comprehensive data collection by the government to make more informed policy decisions, which translates into more quality jobs rather than more jobs.

Key Terms

Labour Force: The Labour force refers to the part of the population which supplies or offers to supply labour for pursuing economic activities for the production of goods and services and therefore, includes both employed and unemployed persons.
Unemployment Rate: The unemployment rate is defined as the percentage of unemployed persons in the labour force.
Labour Force participation rate (LFPR): The LFPR is an age-specific proportion of people working or actively seeking work or of the overall population in the working age group, which is typically 15 years and older.
Worker Population Ratio (WPR): It is defined as the percentage of employed persons in the population.

Datasets related to job creation

Periodic Labour Force Survey (PLFS): It is a survey released by National Statistical Office (NSO) under the Ministry of Statistics and Programme Implementation (MOSPI).
- The annual PLFS report covers both rural and urban areas whereas the quarterly bulletin is for urban centres.
- It estimates the key employment and unemployment indicators like Worker Population Ratio, Labour Force Participation Rate, Unemployment Rate.
Consumer Pyramids Household Survey: It is conducted by the Centre for Monitoring Indian Economy (CMIE) to assess the short-term changes in the economic conditions of households.

Data indicating job scenario in India

Urban unemployment: The 16th PLFS revealed that the unemployment rate in urban areas dipped for the fifth straight quarter (July-Sept 2022) to 7.2% for persons aged 15 years and above compared to 9.8% last year.
- As per CMIE data, All India Unemployment Rate jumped to 8.96: in November compared to 7.77% in October.
- This contrast between PLFS (showing falling unemployment) and CMIE (showing rising unemployment) is because CMIE data does not define unpaid family labour as employment, but PLFS does.
- Hence, the findings that unpaid family labour rising at a time when the economy has slowed, is a sign of rural and urban distress.
Labour participation: The labour force participation rate in India is currently around 46%. This denotes that for every 100 Indians of working age, a staggering 54 are not participating in the labour force.
- In absolute terms, India’s labour force shrank from 445 million to 435 million in six years from 2016-17 to 2021-22.
- In 2021, LFPR was 58% in Brazil, 68% in Indonesia and around 60% in all OECD countries.
Urban vs Rural participation: The reduction in the participation rate was higher in the urban areas than in the rural parts.
- The rate slid from 44.7% to 37.5% in urban areas, while rural areas saw the figure dropped from 46.9% to 41.4%.
Gender breakup: In 2016-17, about 15% women were employed or looking for jobs. This metric dipped to 9.2% in 2021-22 which is indicates that women are not being offered attractive jobs.
- At 19%, the female labour force participation rate in India is even lower than Saudi Arabia (more than 30%).
- Among men, the participation rate declined from more than 74% to 67% in the same period.
- According to ILO, the gender discrepancy is enormous even for the well-educated in India.
Youth unemployment: It has also been increasing steadily as it stood at 22% in 2019 while it was 28% in 2021 as compared to 18% in 2010.
Jump in participation after 25: The CMIE data also reveals a jump in male participation in the labour force after the age of 25. This hints that only few who possibly prepare for exams related to public sector jobs get through.

Distribution of labour force

Agriculture labour force rising: The PLFS indicates 46.5% of the labour force works in the agriculture sector today as compared to 42. 5% in 2019.
- Between 2018-19 and 2019-20, agricultural employment increased by 3. 4 crores while industry and services employment only grew by 93 lakhs.
Regular salaried employees declining: These have dropped from 24% in 2018-19 to 21% in 2020-21 indicating a decline in the quality and number of non-agricultural jobs.
- This is concerning because India may be the only developing country that is pushing people back to agriculture.

Limitations of datasets related to jobs

Exclusions: The unemployment rate only counts those who are unemployed and looking for jobs. For example, a 24-year-old preparing for public sector jobs or a 35-year-old who has given up looking for jobs is not counted.
Silent on the quality of jobs and their productivity: For instance, disguised unemployment, does not show up in these data numbers.
- Disguised unemployment does not affect aggregate economic output as more people are employed than actually needed.

What are the government initiatives to address unemployment in India?

Atma Nirbhar Bharat Rojgar Yojana (ABRY): It was launched in 2020 as part of Atma Nirbhar Bharat package 3.0 to incentivize employers for new employment generation, along with social security benefits to restore the of loss of employment during Covid-19 pandemic.
National Career Service (NCS) Project: It aimed to provide a variety of career related services like job matching, career counselling, vocational guidance, information on skill development courses, apprenticeship, internships, etc.
PM SVANidhi: It focuses to provide affordable working capital to street vendors to resume their livelihoods that were impacted during the Covid-19 lockdown.
Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA): It intended to provide at least 100 days of guaranteed wage employment in a financial year to every rural household whose adult members volunteer to do unskilled manual work.
Production Linked Incentives scheme: The Ministry of Skill development flagship scheme envisaged that 8 lakh jobs will be created by 2025.
- However, 50 million new job seekers will enter the labour market over this period. This means, PLI alone cannot be the solution to address unemployment.

Conclusion

Apart from the direct loss in productivity, India is also missing out on new ideas and valuable developments as a result of the severe employment situation.
Thus, government, private sector and civil society must come together to find a way to come out with a comprehensive data on India’s job scenario.
The goal of gathering such data is to help the government make more informed policy decisions to create more and quality jobs and not to cast it in a negative light.

Q1) What are the 7 types of unemployment?

Seven types of unemployment include Cyclical Unemployment, Frictional Unemployment, Structural Unemployment, Natural Unemployment, Long-Term Unemployment, Seasonal Unemployment, Classical Unemployment, and Underemployment.

Q2) What percentage of workforce is female in India?

Between 2010 and 2020, the number of working women in India dropped from 26% to 19%, according to data compiled by World Bank.

Source: The great jobs hunt: Too few Indians are seeking work and mostly among those working quality of employment isn’t great