Contrasting trends in job growth and unemployment

Source: The post contrasting trends in job growth and unemployment has been created, based on the article “Jobs of the future require upskilling workers” published in “Indian Express” on 26th September is 2024

UPSC Syllabus Topic: GS Paper 3- Economy-employment

Context: The article discusses India’s employment challenges, including job growth, unemployment, skill gaps, and the impact of technology on jobs. It suggests reforms in education and industry to balance economic and job growth for future workforce absorption.

For detailed information on India’s Employment Crisis read Article 1, Article 2

What are the contrasting trends in job growth and unemployment?

1. The RBI’s Capital, Labour, Energy Materials, Services (KLEMS) data shows a 6% increase in job growth for FY24, up from 3.2% in FY23.
2. However, the Centre for Monitoring Indian Economy (CMIE) data shows unemployment rising to 9.2% in June 2024 from 7% in May. The annual unemployment rate for FY24 is 8%.
3. The Periodic Labour Force Survey (PLFS) survey shows urban unemployment decreased slightly from 6.8% to 6.7% between January-March 2023 and January-March 2024.

For detailed information on The conflicting reports on job creation in India read this article here

What are the India’s employment challenges?

1. Job Creation Deficit: India needs to create 1.2 crore jobs yearly, but only 80–90 lakh jobs are generated annually, leaving a 30–40 lakh shortfall (Citigroup Research).
2. Skill Gaps: India faces two key issues: imperfections in labour markets and skill gaps. Many job seekers lack proper training or skills, leading to gaps in the workforce. The demand for jobs in IT and migrant labour highlights the aspirational gap between job seekers’ expectations and available work.
3. Technological Impact: AI and automation reduce employment elasticity, especially in middle management roles.

What Should be Done?

1. Provide better training as both skill and aspirational gaps persist, especially in sectors like IT and manual labour.
2. Focus on sectors like food processing and textiles that cater to the domestic market and absorb more labour.
3. Promote sectors like pharmaceuticals and electronics that can improve international competitiveness and spur job growth.

Question for practice:

Discuss the contrasting trends in job growth and unemployment in India, and the challenges the country faces in addressing the job creation deficit, skill gaps, and the impact of technology on employment.