India Employment Report 2024: ILO | 29 Mar 2024

Source: IE

Why in News?

Recently, the Institute for Human Development (IHD) and International Labour Organisation (ILO) have released a report titled- ‘India Employment Report 2024’, which highlights that India’s youth continue to grapple with soaring Unemployment rates.

• The Institute for Human Development (IHD) was established in the year 1998 under the aegis of the Indian Society of Labour Economics (ISLE), it is a non-profit autonomous institution that aims to contribute towards building a society that fosters and values an inclusive social, economic and political system that is free from poverty and deprivations.

What are the Key Highlights of the Report?

• Poor Employment Conditions:
  • Despite improvements in overall labour force participation and employment rates, employment conditions in India remain poor, with issues such as stagnant or declining wages, increased self-employment among women, and a higher proportion of unpaid family work among youth.
  • India’s youth account for almost 83% of the unemployed workforce and the share of youngsters with secondary or higher education in the total unemployed has almost doubled from 35.2% in 2000 to 65.7% in 2022.

• Youth Employment Challenges:
  • Youth employment and underemployment surged between 2000 and 2019, with educated youths experiencing significantly higher levels of joblessness.
  • The Labour Force Participation Rate (LFPR), Worker Population Ratio (WPR) and the Unemployment Rate (UR) showed a long-term deterioration between 2000 and 2018 but witnessed an improvement after 2019.
  • The improvement coincides with periods of economic distress, both pre and post-Covid-19 with the exception of two peak Covid-19 quarters.

• Paradoxical Improvements:
  • Over the past two decades, India's job market has seen some improvements in certain labour indicators, but the overall employment situation remains challenging.
  • Non-farm sectors have not grown sufficiently to absorb workers from agriculture, despite non-farm employment growing faster than farm employment before 2018.
  • Most workers, around 90%, are engaged in informal work, and the proportion of regular employment, which was steadily increasing after 2000, started declining after 2018.
  • India's large young workforce, often seen as a demographic advantage, faces challenges due to a lack of necessary skills.
    • A significant portion of youth lacks basic digital literacy skills, with 75% unable to send emails with attachments, 60% unable to copy and paste files, and 90% unable to perform basic spreadsheet tasks like putting a mathematical formula.
• Wages and Earnings are Declining:
  • While wages of casual labourers maintained a modest upward trend during 2012–22, real wages of regular workers either remained stagnant or declined. Self Employed real earnings also declined after 2019.
  • Overall, wages have remained low. As much as 62% of the unskilled casual agricultural workers and 70% of such workers in the construction sector at the all-India level did not receive the prescribed daily minimum wages in 2022.
• Changing the Structure of Industrial Employment:
  • There has been a rapid introduction of digitally mediated gig and platform work, which are algorithmically controlled by the platforms and have brought about new features in control of the labour process.
  • Increasingly, platform and gig work have been expanding, but it is, to a large extent, the extension of informal work, with hardly any social security provisions.
• Migration is Likely to Increase in Future:
  • The rates of urbanization and migration are expected to considerably increase in the future.
  • India is expected to have a migration rate of around 40% in 2030 and will have an urban population of around 607 million.
  • The bulk of this increase in urban growth will come from migration. The pattern of migration also shows regional imbalance in the labour markets.
  • The direction of migration in general is from eastern, north-eastern and central regions to southern, western and northern regions.
• Regional Disparities:
  • Significant variations in employment outcomes exist across states, with certain states consistently ranking lower in employment indicators.
  • States like Bihar, Uttar Pradesh, Odisha, Madhya Pradesh, Jharkhand, and Chhattisgarh have struggled with poor employment outcomes over the years, reflecting the influence of regional policies.
• Widening Gender Gap:
  • India is facing the challenge of a substantial gender gap in the labour market, with low rates of female labour force participation.
  • The unemployment challenge among young women, especially those who are highly educated, is enormous.
  • Social inequalities also persist despite affirmative action and targeted policies, with Scheduled Castes and Scheduled Tribes facing barriers to accessing better job opportunities.
    • Although educational attainment has improved across all groups, social hierarchies persist, exacerbating the employment disparity.
• Policy Recommendations:
  • To enhance production and foster growth with a focus on employment, policy recommendations are proposed:
    • Integrate an employment creation agenda into macroeconomic policies, particularly emphasising productive non-farm employment, notably in manufacturing.
    • Prioritise labour-intensive manufacturing to absorb unskilled labour and complement with selected services.
    • Concentrate efforts on supporting micro, small, and medium-sized enterprises through a decentralised approach.
    • Increase agricultural productivity, generate non-farm employment opportunities, and encourage entrepreneurship.
    • Invest in green and blue economies, leveraging strategic investments, capacity-building initiatives, and policy frameworks to unlock substantial employment potential.
  • To enhance job quality, strategies are recommended:
    • There's a need to invest in and regulate sectors such as the care industry and the digital economy, which are anticipated to be significant sources of employment for young people.
    • Fostering an inclusive urbanisation and migration policy is essential, particularly given India's projected rise in urbanisation and migration rates, driven by youths seeking decent employment opportunities, predominantly in urban areas.
    • Ensuring a robust supportive role for labour policy and regulation is crucial. This involves guaranteeing a minimum standard of employment quality and safeguarding basic rights for workers across all sectors.
  • To address labour market inequalities, key approaches are suggested:
    • Implement policies to enhance women's participation in quality employment.
    • Integrate high-quality skills training into education to uplift economically disadvantaged groups and boost employability.
    • Iimprove access to information technology and bridge the digital gap. Establish a fair labour market by combating discrimination against women and marginalised communities.

Read more: NFHS-5 National Report, Household Consumption Expenditure Survey 2022-23