Where are the Jobs?

An increase in the employment rate is on account of self-employment, which includes unpaid labour

THE PROMISE OF ONE CRORE JOBS TO THE country’s youth had been a main plank of the Narendra Modiled BJP in the run-up to the 2014 election. On the eve of a third bid at power, the prime minister is claiming that the unemployment rate in the country is at its lowest in the past six years.

On the surface, the unemployment rate, which measures the percentage of unemployed individuals over age 15 in the labour force, has declined from 6 per cent in 2017-18 to 3.2 per cent in 2022-2023, according to the Periodic Labour Force Survey (PLFS). However, as labour economist K.R. Shyam Sundar, adjunct professor at MDI Gurgaon, points out, “Ground realities suggest an increase in poor quality of jobs—self-employed labour, contract workers, fixed employment workers.”

Thus, of the 58 per cent who are employed or seeking work, 57.3 per cent are self-employed. A majority could be working as unpaid helpers in household enterprises (18.3 per cent) or running an unskilled small business (39 per cent) such as street vendors or tea stall/paanwala, work that ranks low on the job quality index. The remaining 21.8 per cent are casual labour. Regular salaried jobs, considered high-quality jobs due to benefits like insurance, pension etc., constitute just 20.9 per cent. Also, as Sundar points out, “While 12 million Indians enter the workforce every year, the salaried jobs are not keeping pace with the rising population, leading to rise in self-employment.” Salaried workers have declined from 21.1 per cent in 2020-21 to 20.9 per cent in 2022-23; self-employed workers have risen from 55.6 per cent to 57.3 per cent in the same period. The problem of informality and lack of good quality jobs is also highlighted in the recently-released ‘India Employment Report 2024’, published by the Institute for Human Development (IHD) and the International Labour Organization (ILO).

It is a vicious circle. As experts say, enough jobs have to be created for consumption growth. Only if consumption growth is booming will companies’ capacity utilisation improve, and they will invest more. Trouble is, thanks to the K-shaped growth, consumption is not picking up sufficiently.

The way forward for the government would be to implement a national employment policy, the ILO convention on which India had ratified way back in 1961. Acknowledging the problem is the first step in fixing it. ■

Ground realities suggest an increase in poor quality of jobs—self-employed labour, contract workers, fixed employment workers. The government can’t assert it has addressed the macrolevel employment problem

—K.R. SHYAM SUNDAR Adjunct professor, MDI Gurgaon