Unemployment remains a concern post-pandemic

The security breach in Parliament has put the focus on the employment situation in the country

Last Wednesday, two men entered the Lok Sabha and sprayed yellow gas from canisters, while two others stood outside Parliament and shouted slogans and sprayed gas from similar canisters. The intruders told the police that they were protesting against the government’s inability to tackle unemployment.

A detailed news report published in The Hindu stated that all the four persons were either not employed or were unhappy about their employment status. D. Manoranjan, who opened a canister inside the Lok Sabha, was helping his father in the sheepbreeding and poultry business after completing a course in Computer Science Engineering. Sagar Sharma, who accompanied Manoranjan, was forced to drop out of school after higher secondary due to his family’s financial difficulties and was driving an autorickshaw, according to his parents. Neelam Verma, who protested outside Parliament, used to talk regularly about unemployment and other issues plaguing the poor. Neelam, who holds an M.Phil in Sanskrit, was a government job aspirant from Haryana. Her mother said, “Neelam would often say it is better to die as she could not find a job despite having studied so much.” Amol Shinde, who was with Neelam, had complained to his parents that the COVID19 lockdown had killed his chances of getting into the Army. He has been trying to clear the police recruitment exam since then.

A look at employmentrelated indicators published by the Centre for Monitoring Indian Economy (CMIE) shows that they worsened in the postpandemic period. Table 1 shows the Labour Force Participation Rate (LFPR), which is the share of the working age population which was either working or seeking employment. In FY23, the overall LFPR in India was 39.5%, the lowest since at least FY17, including the pandemic years. Among men, it was 66% and among women, it was 8.7% — both the lowest since at least FY17. So, an increasing share of Indians in the working age were neither employed nor willing to seek employment even after the pandemic.

“India’s LPR displayed a consistent downward trend in the last seven years. Surprisingly, a bulk of this decline was witnessed before the pandemic itself, with the pandemic only exacerbating the situation,” CMIE wrote in June this year.

Table 2 shows the unemployment rate (UR), which is the share of unemployed persons in the labour force. The UR was 7.6% in FY23, higher than prepandemic levels.

The data show that fewer people of working age were looking for jobs, of which a relatively high share of people were unemployed.

This trend continued even if the latest available quarterwise data was considered. Table 3 shows the LFPR and UR for all the quarters ending September between 2016 and 2023. The overall LPFR was about 7 percentage points lower in 2023 than it was in 2016. Moreover, the overall LFPR was slightly lower than the quarters ending September 2020 and September 2021 (7.3% each) — the pandemicaffected periods. More importantly, the UR in the quarter ending September 2023 was 8.1%, much higher than what it was in the quarters ending September 2020 and September 2021 (7.3% each).

This trend continued even if the latest available monthwise data was considered. Table 4 shows the LFPR and UR for all the November months between 2019 and 2023. The UR was as high as 9.2% in November 2023, over one point higher than any November since 2019, including the pandemic months. These figures show that India is in the grip of a persistent unemployment problem.