Recently, a report released by Citigroup (Headquartered in the US), said that India’s unemployment challenge is a multi-faceted one and India will struggle to create sufficient employment opportunities even with a 7 percent GDP growth rate.

Key Highlights of the report:

  • The official unemployment rate is low at 3.2%, there are significant concerns about job quality and potential under-employment. 
  • Agriculture employs 46% of the workforce but contributes less than 20% to the GDP. Both manufacturing and services sectors employ fewer people relative to their GDP contribution. 
  • Rural employment remains high at 67%, suggesting a slowdown in rural-to-urban migration since 2018.
  • Only 25% of non-agricultural jobs are in the formal sector, and just 21% of the labor force holds salaried positions. 

Opposition’s claims regarding the report:

  • The crisis of unemployment is worsened due to the severe impact on job-generating MSMEs from sudden demonetization and rushed implementation of GST, coupled with increased imports from China. 

Government’s Counter to the Report:

  • The report used non-standard definitions of employment and less robust sampling methodologies. 
  • The report fails to account for the comprehensive and positive employment data available from the Periodic Labour Force Survey (PLFS) and the Reserve Bank of India’s KLEMS [capital (K), labor (L), energy (E), material (M) and services (S)] data.
    PLFS and RBI’s KLEMS data, says India has generated more than 8 crore (80 million) employment opportunities from 2017-18 to 2021-22.

The PLFS report shows an improving trend in key labour market indicators for individuals aged 15 and above from 2017-18 to 2022-23:

  • Worker Population Ratio: Increased from 46.8% in 2017-18 to 56% in 2022-23.
  • Labour Force Participation Rate: Rose from 49.8% in 2017-18 to 57.9% in 2022-23.
  • Unemployment Rate: Declined from 6.0% in 2017-18 to 3.2% in 2022-23.
  • During the fiscal year 2023-24, over 1.3 crore new subscribers joined the Employees Provident Fund Organisation (EPFO), marking a significant increase from the 61.12 lakh who joined in 2018-19.
  • Furthermore, the NITI Aayog report on the gig economy anticipated that platform workers will reach 23.5 million by 2029-30, forming 6.7 percent of the non-agricultural workforce.

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