India Employment Report 2024 | UPSC

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India Employment Report 2024

  • The India Employment Report 2024 was recently released by the Institute for Human Development and International Labour Organisation (ILO).
  • There have been “paradoxical improvements” in labour market indicators such as the labour force participation rate, workforce participation rate, and unemployment rate in India in recent years after long-term deterioration from 2000-2019.
  • The improvement has coincided with periods of economic distress, both before and during the Covid-19 pandemic (2019-2022).

Key areas covered under the Report

a) Employment quality

  • The share of self-employment remained almost stable around 52% between 2000 and 2019, while regular employment increased by almost 10 percentage points, to 23.8% from 14.2%.
  • This reversed by 2022, with self-employment increasing to 55.8%, while the share of regular employment declined to 21.5%.
  • Regular employment is generally seen as providing better-quality jobs due to the regularity of employment and associated social security benefits, while casual work is linked with relatively poor-quality jobs due to its irregular nature and lower daily earnings.

b) Participation of women

  • India’s low labour force participation rate (LFPR) is largely attributed to the low female LFPR at (32.8%) in 2022, which was much lower than the world average of 47.3% in 2022.
  • Female LFPR which was declining between 2000 and 2019, started rising between 2019 and 2022.

c) Structural transformation

  • There has been a reversal of the slow transition towards non-farm employment after 2018-19. The share of agriculture in total employment fell to around 42% in 2019 from 60% in 2000.
  • This shift was largely absorbed by construction and services, the share of which in total employment increased to 32% in 2019 from 23% in 2000. The share of manufacturing in employment has remained almost stagnant at 12-14%.
  • Since 2018-19, this slow transition has stagnated or reversed with the rise in the share of agricultural employment.

d) Youth employment

  • Youth employment and underemployment increased between 2000 and 2019 but declined during the pandemic years.
  • However, unemployment among youths, especially those with secondary-level or higher education, has intensified over time.
  • In 2022, the share of unemployed youths in the total unemployed population was 82.9%. The share of educated youths among all unemployed people also increased to 65.7% in 2022 from 54.2% in 2000.

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e) Employment Condition Index

  • The ‘employment condition index’ has improved between 2004-05 and 2021-22. But some states — Bihar, Odisha, Jharkhand, and UP — have remained at the bottom throughout this period, while some others — Delhi, Himachal Pradesh, Telangana, Uttarakhand, and Gujarat — have stayed at the top.
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Steps taken by the Government to reduce unemployment

a) Education:

  • Education is the most important tool that empowers the individual and enhances his capability and employability.
  • Thus, it is essential to have access to high quality education and be able to develop the necessary skills that are required by the labour market to ensure that they are gainfully employed.
  • The new National Education Policy 2020 has been formulated, taking into account the changing needs of the society and people.

b) Skills Development:

  • To ensure employability and also address demand-supply mismatches in the labour market, youth must have skills that are relevant to the employment needs.
  • The Government of India has adopted skill development as a national priority and have launched the Skill India Mission.
  • Besides, a dedicated Ministry of Skill Development and Entrepreneurship was created in 2014.

c) Entrepreneurship:

  • Promoting entrepreneurship is essential for enabling the youth to productively contribute to the economic development of the country.
  • The Government of India has accorded priority to entrepreneurship through various measures such as Startup-India, Mudra Scheme, etc. to train and finance entrepreneurs.

d) Skill India Mission:

  • Under this Mission, the Government of India is implementing various programmes through many of the Central Ministries/Departments for skill development.
  • Major Schemes include: Pradhan Mantri Kaushal Vikas Yojana (PMKVY); National Apprenticeship Promotion Scheme; Rural Self-Employment and Training Institutes (RSETI), Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY), etc.

e) Other schemes and policies

  • The Government of India is encouraging various projects involving substantial investment and public expenditure on schemes like Prime Minister’s Employment Generation Programme (PMEGP) of the Ministry of Micro, Small & Medium Enterprises, Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) & Pt. Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY) of the Ministry of Rural Development, Deen Dayal Antodaya Yojana-National Urban Livelihoods Mission (DAY-NULM) of the Ministry of Housing & Urban Affairs etc. for employment generation.
  • Besides these initiatives, various flagship programmes of the Government such as Make in India, Start-up India, Digital India, Smart City Mission, Atal Mission for Rejuvenation and Urban Transformation, Housing for All, Infrastructure Development and Industrial Corridors are also oriented towards generating employment opportunities.

Other Strategies to address Unemployment:

  • These apart, numerous other strategies can also be adopted to address the greater challenge of unemployment in the Indian economy.
  • While the Micro, Small and Medium Enterprises (MSMEs) sector should be given further impetus, facilities have to be provided for greater investments in the Agriculture sector, particularly agro-based industries and food processing industries.
  • Targetted programmes for employment generation, focus on synergy between different sectors of economy, women’s participation in the economy, etc. should be accorded priority.
  • Investment and regulations are required in the emerging care and digital economies, which could be an important source of productive employment. The lack of job security, irregular wages, and uncertain employment status for workers pose significant challenges for gig or platform work.
  • Economic policies are required to boost productive non-farm employment, especially in the manufacturing sector, with India likely to add 7-8 million youths annually to the labour force during the next decade.
  • More support needs to be provided to micro, small and medium-sized enterprises, especially by providing tools such as digitalisation and AI and a cluster-based approach to manufacturing.

Important terms

a) Unemployment

  • Unemployment is not synonymous with joblessness. The International Labour Organization (ILO) defines unemployment as being out of a job; being available to take a job; and actively engaged in searching for work.
  • Therefore, an individual who has lost work but does not look for another job is not unemployed.

b) Labour Force

  • The labour force is defined as the sum of the employed and the unemployed. Those neither employed nor unemployed — such as students and those engaged in unpaid domestic work — are considered out of the labour force.

c) Labour Force Participation Rate (LFPR)

  • LFPR is defined as the percentage of personsin labour force who are working or seeking or available for work in the population. It reflects the proportion of the ‘labour force’ in the total population.

who are working or seeking or available for work

 

d) Worker Population Ratio (WPR)

  • WPR is defined as the percentage of employedpersons in the population. It reflects the proportion of the persons ‘working’ in the labour force.

e) Unemployment Rate (UR)

  • UR is defined as the percentage of persons unemployedamong the persons in the labour force.
  • The unemployment rate could also fall if an economy is not generating enough jobs, or if people decide not to search for work.

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f) Employment Condition Index

  • The index is based on seven labour market outcome indicators:
    • (i) percentage of workers employed in regular formal work;
    • (ii) percentage of casual labourers;
    • (iii) percentage of self-employed workers below the poverty line;
    • (iv) work participation rate;
    • (v) average monthly earnings of casual labourers;
    • (vi) unemployment rate of secondary and above-educated youth;
    • (vii) youth not in employment and education or training.

References:

 

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