India’s Employment Growth

•Syllabus: Employment*

•Source: PIB*

Context: India has witnessed significant employment growth over the years. With the employment increased by nearly 36%, adding around 17 million jobs during 2016-17 and 2022-23, India’s economic trajectory demonstrates sustained job creation across key sectors.

Summary of India’s Employment Growth (2016-2023):

• Employment growth: India’s employment grew by 36%, adding 17 million jobs between 2016-17 and 2022-23. This challenges the concept of “jobless growth” and shows a positive correlation between GDP growth and job creation.

• Worker population ratio (WPR): WPR increased by 9 percentage points, reflecting a 26% rise in employment from 2017 to 2023, based on PLFS data.

• Consumption-driven growth: India’s growth is driven by domestic consumption, which suggests that more people are securing employment and boosting economic demand.

• Employment elasticity: Between 2017-23, a 1% GDP increase led to a 1.11% rise in employment, indicating strong job creation relative to economic growth.

• Sectoral job creation: The services sector showed high labor intensity with a labor-capital ratio of 1.17, highlighting robust job generation in the services industry.

Sector-Specific Insights:

• Improved labor market: Unemployment fell to 3.2% in 2022-23, showing significant labor market improvement.

• Sectoral shift: While agriculture still employs 45% of the workforce, there’s a growing shift toward manufacturing and services.

• Youth employment: Youth unemployment (ages 15-29) declined from 17.8% in 2017-18 to 10% in 2022-23.

• Female participation: Female labor participation has steadily increased due to policy support.

• Wage growth: Rural wages grew at 6.9% CAGR (FY15-FY22), while urban wages grew at 6.1%, reflecting higher labor demand.

Economic Growth

• Real GDP grew by 8.2% in FY23-24, while the manufacturing sector grew 9.9% after a previous decline of -2.2% in FY22-23.

Conclusion

India’s job market has strengthened, supported by economic growth, government policies, and skilling initiatives. Further investments in education and healthcare will sustain this positive trend.

Note: You don’t need to remember all the data but try to remember certain specific data which can be used as value addition in exam.

Insta Links:

• ILO India-employment-report-2024

• Unemployment

Disguised unemployment generally means (UPSC – 2013)

a) large number of people remain unemployed

b) alternative employment is not available

c) marginal productivity of labour is zero

d) productivity of workers is low

Answer: c)

1.Most of the unemployment in India is structural in nature. Examine the methodology adopted to compute unemployment in the country and suggest improvements. (UPSC – 2023)