The Survey has reposed confidence in the recovery of the country’s labour market and has said that employment levels in both urban and rural areas have recovered to pre-Covid levels.
The comments come even as the Survey has maintained cautious optimism over economic growth in the new fiscal amid global political and economic uncertainty.
“While the pandemic impacted both labour markets and employment ratios, now with sustained effort in the last few years, coupled with quick response after the pandemic, and the world’s largest vaccination drive being undertaken in India, labour markets have recovered beyond pre-Covid levels, in both urban and rural areas, as observed in supply-side and demand-side employment data,” said the Survey, tabled in Parliament by finance minister Nirmala Sitharaman on Tuesday.
Citing data from the Periodic Labour Force Survey, EPFO payroll and quarterly employment survey, the Survey said the employment situation has improved both from the demand as well as supply side.
Growth is inclusive when it creates jobs, it further said.
The unemployment rate declined to 4.2% in 2020-21 from 5.8% in 2018-19, it said, while highlighting that even the rural female labour force participation rate has shown an improvement to 27.7% in 2020-21 from 19.7% in 2018-19.
The all-India unemployment rate according to CMIE was 8.3% in December, although it has climbed down in January with the 30-day moving average unemployment rate at 7.13% on January 30.
Significantly, it has contended that the country’s female labour force participation rate is likely
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to be underestimated and has called for reforms in survey design and content to capture the reality of working females more accurately. It has questioned the Periodic Labour Force Survey (PLFS) questionnaire noting that contrary to International Labour Organization (ILO) recommendations, it does not double-check individuals’ labour force status, relying too much on how the individual self-identifies in the first instance.
“In a World Bank and ILO study in Sri Lanka, such methodological issues accounted for close to eight percentage point underestimation of the female employment-to-population ratio,” the Survey said.
Declining participation by women in the workforce has been one of the biggest challenges for India’s labour markets and female participation is much lower than that in neighbouring countries.
The Survey has said there’s a need to broaden the horizon of measuring work, which constitutes the whole universe of productive activities alongside employment, especially for women. It has recommended a wholesome measurement of “work”, which may require improved quantification through redesigned surveys.
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There is also a need to nullify gender-based disadvantages to enable free choice of women to join the labour market and services such as affordable creches, career counselling & handholding, lodging and transportation can enable more women to work.
Noting that 75% of rural female workers are employed in the agricultural sector, which implies a need to upskill and create employment for women in agriculture-related sectors such as food processing, the Survey suggested that self-help groups can play a crucial role in shaping rural women’s potential into concrete developmental outcomes of financial inclusion, livelihood diversification and skill development.
“SHGs, having demonstrated their resilience and flexibility during Covid, can be an effective conduit to tap the rising willingness of females to work,” it said.
The Survey also expressed hope that real wages will rise with a moderation in inflation going forward, while noting that growth in real rural wages had been negative due to elevated inflation.
It also indicated that there has been further progress on the long-pending Labour Codes, with more states pre-publishing draft rules. It, however, did not give a timeline for their implementation.
As of December 13, 2022, 31 states had also pre-published draft rules under the Code on Wages, 28 states under the Industrial Relations Code, 28 states under the Code on Social Security and 26 states under the Occupational Safety Health and Working Conditions Code.
“The new laws are in tune with the changing labour market trends and, at the same time, accommodate the minimum wage requirement and welfare needs of the unorganised sector workers, including the self-employed and migrant workers, within the legislation framework,” the Survey said.
Pre-publication of rules by states in their official gazettes for public consultation is a requirement before the Codes can be notified and brought into effect.