Giving credence to the notion of India’s economic growth being increasingly jobless, a new report from the International Labour Organisation (ILO) noted that while the gross value added (GVA) grew at an annual average rate of 6.7% between 2012 and 2019, the employment growth “was nearly negligible, at 0.01%.” This was even worse than in the period between 2000 and 2012 when the GVA grew 6.2% and employment, 1.6%.
Worse, youth unemployment in India increased nearly threefold, from 5.7% in 2000 to 17.5% in 2019, but declined since to 12.1% in 2022, the report released by ILO and Institute of Human Development (IHD) said, while adding that almost 83% of the total unemployed workforce in the country is youth.
“The incidence of unemployment was much higher among young people in urban areas than in rural areas and among younger youths (aged 15–19) than older youths (aged 20–29),” the report titled India Employment Report 2024 said. “Female unemployment rates were much higher than among men in 2019 but fell to the same level by 2022,” it said.
The report further mentioned that the unemployment in youths has increased with the level of education, with the highest rates among those with a graduate degree or higher. In 2022, the unemployment rate among youths was six times greater than among persons with a secondary or higher level of education, at 18.4% and nine times greater among graduates, at 29.1%. Unemployment rate for persons who cannot read and write stood at 3.4%.
After 2019 and due to the COVID-19 pandemic, there was a “substantial increase” in employment, with agricultural employment growth even outpacing the growth in agriculture GVA.
An important feature of the growth process was the slow transition of the workforce from agriculture to non agriculture between 2000 and 2019, the report said. “The transfer of labour from agriculture has been to construction and services; manufacturing remained stagnant, at 12–14%,” it said.
There has been a decline in the share of agricultural employment but a much faster decrease in the share of GVA. This process of “slow structural transformation” reversed post 2019, with a substantial rise in agricultural employment. “This pattern of growth is rather unique for a lower-middle-income country like India,” said the report.
On wages, the report highlighted that at all-India level, 40.8% of regular workers and 51.9% of casual workers did not receive the average daily minimum wage prescribed for unskilled workers in the agriculture sector. And among construction workers, 39.3% of regular workers and 69.5% of casual workers did not receive the average daily minimum wages.
Moreover, the report said that the proportion of women in unpaid family work declined between 2000 and 2019 but increased significantly between 2019 and 2022, indicating a rise in “vulnerable self-employment”.
On apprenticeship training, the report said that although there is a renewed focus on apprenticeship training, low apprenticeship enrolment against the stated targets is an issue of concern. “Of around 120,000 establishments, only around 25,000 offer apprenticeships. Given the size of the youth population, it is very low,” it noted.