No of people employed rose 5% to 580 mn in 2022-23

The growth in employment numbers may be the outcome of low base of the pandemic years

The number of people in jobs grew nearly 5% to 580 million in the financial year 2022-23, according to estimates being prepared by the Reserve Bank of India (RBI), two persons aware of the development said.

The growth numbers, quite likely the outcome of the low base of the pandemic years, will form part of RBI's KLEMS database, based on an analysis of the Periodic Labour Force Survey (PLFS) data for the same period.

The KLEMS data, which provides insights into five key inputs in production—capital (K), labour (L), energy (E), materials (M) and services (S)—is expected to be released by the RBI in a couple of months.

KLEMS gives granular data on the inputs used in the production process and the output generated by an economy, while PLFS provides information on the size and composition of the labour force, employment trends across different sectors and demographic groups, and unemployment rates.

KLEMS data is released after the PLFS data, which is usually published in October each year. Both are vital to understanding different aspects of the economy and formulating suitable policies.

According to the initial findings, the number of employed people grew by about 30 million from 553 million in 2021-22, according to the KLEMS database for that period.

India has seen a growth of 110 million jobs in the five years from 2017-18, when it was 470 million, to 2022-23, said one of the two persons mentioned above.

As per KLEMS data for 2021-22, the highest 237 million jobs were created in agriculture and allied sectors, followed by 68 million jobs in construction and 63 million in trade.

The lowest 324,000 jobs were in industries involved in manufacturing refined petroleum products. The plastics industry generated 1.32 million jobs.

Pronab Sen, a noted economist and former country director for the India Programme of the International Growth Centre (IGC), said, “It is possible, considering that the previous year was the covid year, during which employment was seriously affected, leading to an increase in the unemployment rate to 9%, compared with our normal rate of 3%.”

“These are not new job opportunities, but rather the reopening of job opportunities that were closed during the pandemic. Therefore, it cannot be considered as momentum. Instead, it indicates that our economy is recovering from the covid year,” Sen said.

Prof. N.R. Bhanumurthy, a noted economist and vice-chancellor of Dr B.R. Ambedkar School of Economics University, Bengaluru (BASE University), said, “The estimated increase of around 27 million between the two years is a significant number. This shows the number of jobs created during that period, which is important. This increase is significant because both the organized and unorganized sectors were severely affected during the covid pandemic.”

“This increase indicates that many activities have returned to normal, especially in contact-intensive sectors, which began reviving in 2022-23,” he said.

The PLFS data encompasses all sectors, covering a wide spectrum of employment types such as organized, unorganized, self-employed, and agricultural workers. According to the KLEMS database, the total employment generation in India has surged to 553 million in 2021-22, compared to 471 million in 2017-18.

This translates to 82 million more jobs.

Queries emailed to the spokespersons of the labour and employment ministry and RBI remained unanswered at press time.

mn Growth in number of jobs in five yrs from 2017-18

mn The number of employed persons in 2021-22

Asia's Growth and Inflation Outlook Improves, but Risks Remain, which was released on Tuesday.

China is the largest economy in the region and India the third-largest, coming in after Japan.

“We have raised our regional growth forecast for this year to 4.5%, up 0.3 percentage points from six months earlier, after a 5% expansion in 2023. The revision reflects upgrades for China, where we expect policy stimulus to provide support, and India, where public investment remains an important driver, making it the world’s fastest-growing major economy,” the IMF report said. “In a still subdued external environment, robust private consumption will remain the main growth driver in Asia’s other emerging market economies. The Asia growth forecast for 2025 is unchanged at 4.3%,” it added.

Anticipating increased economic activity in the ongoing fiscal (FY25), the IMF on 16 April raised India’s FY25 GDP growth forecast to 6.8% from its earlier forecast of 6.5%.

The IMF’s upward revision of the FY25 GDP growth forecast came after similar revisions were made by several others, including the World Bank, Asian Development Bank and S&P Global.

In its April edition of the World Economic Outlook, the IMF said it expects India's FY26 (next fiscal) GDP growth at 6.5%. IMF expects India to grow at 7.8% in FY24.