NEW DELHI: The divide between the government and the private agencies on India’s employment scenario exacerbated on Monday, with two sets of official statements painting a rosier picture that the private-sector narrative.
The labour ministry has issued a “rebuttal” to a recent Citibank report that said the country would struggle to create enough jobs at the current pace of economic growth. On its part, the Reserve Bank of India has said that, on a provisional basis, employment growth rose to 6% in 2023-24 from 3.2% in the previous fiscal year, with the addition of 46.7 million jobs.
However, the RBI did not provide industry-wide break-up of employment growth in the last fiscal year, which, going by the latest release, bucked a declining trend seen at the overall economy level since 2019-20 (see chart). What the RBI came out with was the time-series data on productivity performance — the India KLEMS database– , anchored by the International Household Survey Network.
Last week, Citibank in a report had stressed that the country would need more concerted steps to boost employment and skills. It had estimated that India would need to produce about 12 million jobs a year over the next decade to absorb the number of new entrants to the labour market. Based on a economic growth rate of 7%, India can only generate 8-9 million jobs a year, it had said.
According to the labour ministry statement, however, “the Citigroup report fails to consider the positive trends and comprehensive data from official sources.” It cited KLEMS data to state that more than 80 million employment opportunities were created from 2017-18 to 2021-22, translating to an annual average of over 20 million.
To be sure, the KLEMS data or the other official data that the ministry highlighted like Periodic Labour Force Survey or the EPFO subscriber base, aren’t in sync with the figures put out by other private agencies either.
According to the Centre for Monitoring Indian Economy (CMIE), unemployment rate in India rose to 8% in 2023-24 from 7.5% and 7.7% respectively in 2022-23 and 2021-22. The monthly rate of joblessness, as per the CMIE, was at a nine-month high of 9.18% in June, 2023.
Employment rate, according to the CMIE, dropped sharply from 42.79% in 2016-17 to 36.53% in the pandemic-hit 2020-21. It has very marginally improved to 37.02% in 2021-22, but again dropped to a fresh low of 36.49% in 2022-23. The figure of 37.2% for 2023-24 is hardly impressive, and is inconsistent with official data, though these aren’t strictly comparable.
Many economists also cite worrying trends of a reverse migration of job seekers to rural areas, dismal labour force participation and prolonged contraction in real rural wages.
Source: The Financial Express
