The government on July 8 refuted a report by Citigroup, which claimed that the country will struggle to create enough jobs for its population over the next decade even with a 7 percent growth rate.
The report suggested more concerted steps were needed to boost employment creation.
In its rebuttal, the government highlighted ‘several shortcomings’ in the report, which it claimed does not “analyse all official data sources available in the public domain”.
“The report fails to account for the comprehensive and positive employment data available from official sources such as the Periodic Labour Force Survey (PLFS) and the Reserve Bank of India’s KLEMS data,” the Ministry of Labour and Employment said.
According to PLFS and RBI’s KLEMS data, India has generated more than 8 crore (80 million) employment opportunities from 2017-18 to 2021-22. This translates to an average of over 2 crore (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 in its reply.
The ministry said that the official data sources like PLFS, RBI, EPFO, etc. show consistent improvements in the key labour market indicators, including increased Labour Force Participation Rate (LFPR) and Worker Population Ratio (WPR), and a declining Unemployment Rate during last five years. EPFO and NPS data further support the positive employment trends.
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 indicate robust future prospects, it added.
The Ministry of Labour and Employment also cautioned against the selective use of private data sources that can lead to misleading conclusions about India's employment scenario.
Further, some authors use data selectively, which undermines the credibility of their analysis and does not present an accurate picture of the employment scenario in India, the reply said.
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.
Government’s counter
The Annual PLFS report depicts an improving trend in labour market indicators related to: (i) Labour Force Participation Rate (LFPR), (ii) Worker Population Ratio (WPR) and (iii) Unemployment Rate (UR) for persons of age 15 years and above during 2017-18 to 2022-23.
The WPR i.e. employment has increased from 46.8% in 2017-18 to 56% in 2022-23. Similarly, the labour force participation has also increased in the country from 49.8% in 2017-18 to 57.9% in 2022-23. The Unemployment Rate has declined from 6.0 % in 2017-18 to a low of 3.2% in 2022-23.
The PLFS data shows that during the last 5 years, more employment opportunities have been generated compared to the number of people joining the labour force, resulting in a consistent reduction in the unemployment rate.
During 2023-24, more than 1.3 crore subscribers joined EPFO, which is more than double compared to 61.12 lakh joined EPFO during 2018-19. Moreover, during last six and half years (since September, 2017 to March, 2024) more than 6.2 crore net subscribers have joined EPFO.
More than 7.75 lakh new subscribers have joined the National Pension System (NPS) during 2023-24 under the Union and state governments. This is 30% more than 5.94 lakh new subscribers joining NPS under government sector during 2022-23.
The Indian Staffing Federation (ISF) informed the Ministry of Labour and Employment that they are employing about 5.4 million formal contract workers. Nearly 30% demand in the sector remains unfulfilled at frontline across manufacturing, retail, banking due to talent shortages and labour mobility.
The Global Capability Centers (GCCs) in India have shown remarkable growth in recent years.
The NITI Aayog report on gig economy projects a substantial increase in platform workers, which is expected to reach 2.35 crore (23.5 million) by 2029-30, underscoring the rapid expansion of the gig economy. The gig workers are expected to form 6.7% of the non-agricultural workforce or 4.1% of the total livelihood in India by 2029-30.