Refuting a Citigroup report on India’s job condition, the labour ministry said that the official data sources show consistent improvements in key labour market indicators besides a declining unemployment rate during the last five years.
In an official release, the labour ministry mentioned that the Periodic Labour Force Survey, RBI, EPFO, show an increase in Labour Force Participation Rate (LFPR) and Worker Population Ratio (WPR), and a declining unemployment rate.
As per the PLFS, India’s unemployment rate, as per the current weekly status, declined to 5% in 2023 from 5.7% in 2022. The LFPR rose to 56.2% from 52.8%, and the WPR increased to 53.4% from 49.8%.
The ministry further said that the trends in manufacturing, expanding service sector, infrastructure growth, apart from others, including emerging opportunities in multiple sectors such as gig and platform economy and GCCs (global capacity centres) indicate “robust future prospects.”
Hence, the “selective use” of private data sources can lead to misleading conclusions about India’s employment scenario, said the ministry, while emphasising on the need for the credibility and comprehensiveness of official data.
Last week, Citigroup in a report had mentioned that India will struggle to create enough jobs for its growing workforce over the next decade even if the economy grows at a rapid pace of 7%. The report had suggested that the world’s most-populous nation will need more concerted steps to boost employment and skills.
Citi report had estimated that India will need to create about 12 million jobs a year over the next decade to absorb the number of new entrants to the labour market. Based on a growth rate of 7%, India can only generate 8-9 million jobs a year, it had said.
In response, the labour ministry mentioned that as per PLFS and RBI’s KLEMS, India has generated more than 80 million employment opportunities from 2017-18 to 2021-22. This translates to an average of over 20 million employment per year, “despite of the fact that the world economy was hit by Covid-19 pandemic during 2020-21 which contradicts Citigroup’s assertion of India’s inability to generate sufficient employment,” the ministry said.
On the EPFO, the ministry said that the formal sector employment figures are also being bolstered by government efforts to improve ease of doing business, enhance skill development, and provide incentives for job creation in both the public and private sectors. As per the EPFO data, during 2023-24, more than 13 million subscribers joined EPFO which is more than double compared to 6.1 million joined EPFO during 2018-19. Moreover, during the last six and half years more than 62 million net subscribers have joined EPFO.
The government remains committed to creating a robust and inclusive job market, and the evidence suggests substantial progress is being made in this direction, the ministry said.