UNEMPLOYMENT IN INDIA (Syllabus: GS Paper 3 – Economy)

Context: India's unemployment rate recently reached a six-year low of 3.2 percent in the July-June 2022-23 period, indicating a significant improvement as reported in the latest annual Periodic Labour Force Survey (PLFS) report.

• The report, was unveiled by the National Statistical Office (NSO).

Key Points

• Labor Market Indicator: Wage employment is often considered an indicator of a healthy and improving labor market. It reflects the ability of an economy to provide jobs with regular wages, benefits, and job security.
• Decline in Wage Employment: In the past year, there has been a noticeable decline in wage employment opportunities. This decline signifies challenges in the labor market, where there may be fewer job opportunities with consistent wages and benefits.
• Increase in Labor Force Participation Rate: Concurrently, there has been an increase in the labor force participation rate.
• Lack of Decent Job Opportunities: The rise in the labor force participation rate suggests that a growing number of people are entering the labor market.
• Shift Towards Self-Employment: As wage employment opportunities diminish, individuals are increasingly turning to self-employment as an alternative.

Unemployment: NSSO defines unemployment as a situation in which all those who owing to lack of work, are not working but seek work through employment exchanges, intermediaries, friends or relatives. National Sample Survey Office (NSSO) launched Periodic Labour Force Survey (PLFS) in April 2017.

The objective of PLFS is primarily twofold:

• To estimate the key employment and unemployment indicators (viz. Worker Population Ratio, Labour Force Participation Rate, Unemployment Rate) in the short time interval of three months for the urban areas only in the ‘Current Weekly Status’ (CWS).
• To estimate employment and unemployment indicators in both ‘Usual Status’ (ps+ss) and CWS in both rural and urban areas annually.