A Job To Do

Context: India’s unemployment rate in August was 8.3 per cent. Rising unemployment is yet to receive the attention it deserves from government.

Major issues in Indian labour market

• Rising unemployment: Even before pandemic, Periodic Labour Force Survey (PLFS) registered a historically high unemployment rate of 6.1 per cent in 2017-18. Today it is 7-8%.
• Definitional issues in measuring unemployment: Official definition is, you are declared employed if you are engaged in some economic activity for just one hour in any of the past seven days.
• Rising social tensions due to employment stresses: Employment as a political tool is manifested in demands for jobs reservations from various sections of society.
• Low labour force participation rate (LFPR): India’s LFPR is at around 40 per cent when the global rate is close to 60 per cent.
  • In India, very often people do not look for jobs in the belief that none are available.
  • The count of the employed was 408.9 million in 2019-20. In August 2021, employment was much lower at 397.8 million.
• Good quality formal jobs are very less: In a country of over a billion adults, there are less than 80 million salaried jobs.
  • Most are self-employed as farmers, daily wage labourers and entrepreneurs of all kinds.
• Structural regression in employment structure: A reverse-migration is underway. People are moving away from factories as manufacturing jobs shrink, to farms that provide shelter largely in the form of disguised unemployment.

Conclusion: A large part of the solution to this lack of adequate jobs is in increasing investments. For this, the investment climate needs to be business-friendly and government interventions must shift away from supply-side support to spurring demand.