India has an employment problem which has been exacerbated by the pandemic. One indication of the building crisis is the continuing increase, over the years, in work demanded by households under the MGNREGA. In 2014-15, 4.13 crore households got work under the scheme. By 2019-20, just prior to the pandemic, this had risen to 5.48 crore. In 2020-21, at the peak of the economic distress, the number of households that worked under the scheme had risen to 7.55 crore. While that figure declined to 7.26 crore in the subsequent year, it remains considerably higher than the pre-pandemic level, indicating perhaps the continuing absence of alternatives. This growing divergence between the demand and supply of jobs manifests in a myriad of ways — from louder demands for reservation in the public sector by various caste groups, and for including the private sector in its ambit, to state governments exploring ways to ensure job quotas for locals. All this is indicative of a wide and deepening anxiety over employment prospects.
The deterioration in the employment scenario can be tracked at many levels. One, over the years, there has been a sharp fall in the labour force participation rate in India. Data from CMIE suggests that the labour force participation rate has fallen to around 40 per cent. For comparable countries, it is significantly higher. This decline suggests that despite India’s young population, many have simply opted out of the labour force, perhaps feeling let down by the absence of remunerative, productive jobs. The situation is even more dire for women who had a considerably lower participation rate to begin with. India’s female labour force participation is not only lower than the global average, but also lower than countries like Bangladesh. Two, even as the unemployment rate has declined from the highs observed during the initial phase of the pandemic, it remains elevated, suggesting that among those looking for jobs, those unable to find jobs remains high. Three, the unemployment rate is higher among the younger and more educated. As per the periodic labour force surveys, the unemployment rate is higher among those in the 15-29 age group (22.5 per cent in September 2019), and those educated up to at least the secondary level (11 per cent). Four, while there are signs of increasing formalisation as indicated by the EPFO data, a substantial share of the labour force continues to remain employed in the informal sector, lacking a safety net.
While successive governments have taken steps to address the issue, the jobs crisis is in large part the result of the absence of a labour intensive manufacturing sector which can not only absorb the millions entering the labour force each year, but also those moving out of agriculture. For a country of the young, in the midst of a demographic transition, the employment problem is perhaps the most formidable challenge before the government.
Source: Indian Express, 28/04/22
