Union Budget 2024: The Economic Survey 2023-24 stated that the annual unemployment rate for individuals aged 15 and above has been on a downward trend since the COVID-19 pandemic. It noted that the youth unemployment rate has dropped from 17.8% in 2017-18 to 10% in 2022-23, with increased youth participation in the labour force.
It said this decline is accompanied by an increase in the labuor force participation rate (LFPR) and the worker-to-population ratio (WPR). Even under the strict criteria of the current weekly status (CWS), employment recovery is evident in both urban and rural areas.
Urban employment
The quarterly Periodic Labour Force Survey (PLFS) reports provide a more up-to-date picture of urban employment. As of March 2024, the urban unemployment rate for those aged 15 and above declined to 6.7%, down from 6.8% in the same quarter the previous year. This improvement is also reflected in the rising WPR and LFPR.
India's workforce, as per estimates for 2022-23, was nearly 56.5 crores. The distribution of employment indicates that over 45% of the workforce is engaged in agriculture, 11.4% in manufacturing, 28.9% in services, and 13% in construction. The prominence of agriculture in providing employment, especially for females, presents a blend of challenges and opportunities.
Further analysis shows that 57.3% of the workforce are self-employed, of which 18.3% work as unpaid family workers. Casual laborers account for 21.8% of the workforce, while regular wage/salaried workers make up 20.9%. It is worth noting the significant increase in female self-employment, particularly in rural areas, leading to a noticeable surge in the female Labor Force Participation Rate (LFPR) over the past six years.
Employment generation
On employment generation, the PLFS provides quarterly data on urban employment indicators and annually for the entire country, including rural India.
A surge in agriculture employment is partly explained by reverse migration and the entry of women into the labour force in rural India.
"The Annual Survey of Industries has data on workers in nearly 2.0 lakh Indian factories. The total number of factory jobs grew annually by 3.6% between 2013-14 and 2021-22. Somewhat more satisfyingly, they grew faster at 4.0% in factories employing more than a hundred workers than in smaller factories (those with less than a hundred workers). The annual growth rate was 1.2% in the latter set of factories," it noted
In absolute numbers, employment in Indian factories has grown from 1.04 crore to 1.36 crore in this period. India does not yet have a corresponding Annual Survey of Services. The lack of availability of timely data on the absolute number of (formal and informal) jobs created even at annual intervals, let alone at higher frequencies, in various sectors – agriculture, industry including manufacturing and services – precludes an objective analysis of the labour market
situation in the country.
Job creation in private sector
It is worth reiterating that job creation happens mainly in the private sector. Second, many (not all) of the issues that influence economic growth, job creation and productivity and the actions to be taken therein are in the domain of state governments. So, in other words, India needs a tripartite compact, more than ever before, to deliver on the higher and rising aspirations of Indians and complete the journey to Viksit Bharat by 2047. In more than one respect, the action lies with the private sector.
In terms of financial performance, the corporate sector has never had it so good. Results of a sample of over 33,000 companies show that, in the three years between FY20 and FY23, the profit before taxes of the Indian corporate sector nearly quadrupled. Further, newspaper headlines told us that the corporate profits-to-GDP ratio rose to a 15-year high in FY24.
