Unemployment remains high

The 2022 Periodic Labour Force Survey (PLFS) released by the National Sample Survey Office last week has given some cheer on the employment front, but there are other sets of data that do not support the findings. The PLFS shows that the annual unemployment rate had fallen to 4.1 per cent in 2021-22, which is the lowest since the first PLFS report for 2017-18 was released. That may indicate that the labour markets have started to look up.

The survey also shows that the labour force participation rate, which measures the share of the working-age population looking for work, has fallen. The worker population ratio has improved from 52.6 per cent in 2020-21 to 52.9 per cent in 2021-22, from 31.4 per cent to 31.7 per cent for females and from 73.5 per cent to 73.8 per cent for males. The report also shows that the share of agriculture in employment has declined, indicating that migrants are going back to towns and cities for work after the reverse migration during the pandemic.

While these figures are optimistic, there are also other statistics that show that the unemployment rate has gone up. The Centre for Monitoring the Indian Economy (CMIE) has reported that the unemployment rate rose to 7.45 per cent in February, much higher than the 7.14 per cent recorded in January. The number of first-time members joining the Employees’ Provident Fund Organisation (EPFO) declined by 14.5 per cent to 0.8 million in December 2022 from 0.93 million in November. A report by the Indian Staffing Federation had also shown that new flexi staffing jobs grew at the slowest pace in 10 quarters, by 0.8 per cent in the quarter ended December 2022. According to NREGA data, the demand for work in February 2023 increased and was at its highest level since June 2022.

Whatever be the correctness of the unemployment figures, one detail that should cause concern is the participation of women. The labour force participation rate (LFPR) for rural women is 36.6 per cent and for urban women 23.8 per cent. It is more in rural areas because women have a higher rate of engagement in farm work. These are among the lowest women’s participation rates in the world. It is over 50 per cent in South-East Asia and about 70 per cent in China.

In India, it is not only low but may be declining further, too. Even if it is accepted that women’s participation in the informal sector and their unpaid work may not have been fully captured in the statistics, their participation in productive economic work is low in India. Women’s participation in the labour force is considered to be an important metric of social and economic development. Even as the employment situation in the country should improve, boosting women’s employment should receive greater attention.