Over the past decade, India’s employment landscape has undergone a “positive transformation,” marked by significant strides in skill development, entrepreneurship, industry diversification, and fostering inclusive growth. However, the “long-existing” challenge of formalising an expanding workforce continues to cast a shadow, the finance ministry said in a report on Monday.
“There remain long-existing challenges of formalising a burgeoning workforce, facilitating job creation in sectors that can absorb workers shifting from agriculture, and ensuring social security benefits for those in regular wage/salaried employment (as per PLFS 2022-23, 53% of regular wage/salaried employees are not eligible for any social security benefit),” the ministry said.
In the last 10 years, India has witnessed a notable transformation in its employment landscape, marked by several positive trends. This evolution results from various factors, including economic reforms, technological advancements, and an emphasis on skill development. “The slew of structural reforms promoting ease of doing business remains crucial for productive employment generation in the current decade,” the ministry said.
According to the Periodic Labour Force Surveys (PLFS), the unemployment rate has declined substantially from 6% in 2017-18 to 3.2% in 2022- 23, a trend observed across male and female workers in rural and urban areas. And subsequently, the Labour Force Participation Rate (LFPR) has risen from 49.8% in 2017-18 to 57.9% in 2022-23, driven primarily by a surge in female LFPR (FLFPR).
The FLFPR rose from 23.3% in 2017-18 to 37% in 2022-23. The rise has mainly been in rural areas, accompanied by a rise in the share of self-employment and agriculture among working women. Also, the ministry said that while the composition of the female workforce has been tilting towards agriculture, that of the male workforce is tilting away from agriculture. Female rural workforce’s share in agriculture rose from 73.2% in 2017-18 to 76.2% in 2022-23, while that of male declined from 55% to 49.1%.
“This is plausibly due to men taking up rising opportunities in non-agriculture and women at home filling in for the men on the farm,” the ministry said. The ministry notes that the “feminisation” of agriculture also points to a much-needed structural shift within agriculture, where excess (male) labour moves out and remaining (female) labour is utilised efficiently. “Thus, female participation in rural India is productive and remunerative,” it said.
On formal job creations, the ministry said that payroll data for Employees’ Provident Fund Organisation (EPFO) indicate a consistent year-on-year increase in payroll addition since 2018-19. The yearly net payroll additions to the EPFO more than tripled from 6.1 million in 2018-19 to 13.9 million in 2022-23.
The finance ministry also highlighted that over the years, youth employment has been rising in tandem with the youth population. According to the PLFS, youth – age 15-29 years – unemployment rate has declined from 17.8% in 2017-18 to 10% in 2022-23, while youth LFPR has expanded from 38.2% to 44.5% over the same period. “For the proportion of employed youth to rise from 31% to 40.1% in these six years is a feat for a populous country on the upside of a demographic transition,” it said.
