Employment and participation

Source– The post is based on the article “Employment and participation” published in the Business Standard on 28th February 2023.

Syllabus: GS3- Indian economy and employment

Relevance: Facts and statistics about employment level in India

News- The National Sample Survey Office has released its annual summary of the Periodic Labour Force Survey. The report covers the period between July 2021 and June 2022.

What does the survey tell about the employment situation in India?

The PLFS is used to calculate an unemployment rate for India.

The report says that during 2021-22, unemployment in rural areas declined to 3.2% from 3.3% in 2020-21. In urban areas, it declined to 6.3% from 6.6%.

The LFPR for rural women above the age of 15 is at 36.6% in 2021-22 and for urban women above 15 is at 23.8%. By contrast, it is 78.2% for rural men above the age of 15. For urban men above 15, it is 74.7%.

What are the implications of low LFPR in India?

There is a general view that raising the LFPR should be a major priority to increase India’s level of potential economic growth.

There is a broad academic consensus that the female LFPR in India is not increasing and may in fact be declining.

The large difference between the male and female LFPRs sets India apart from its global peers. In most Southeast Asian countries, the female LFPR is over 50%. In China it is close to 70%.

The influx of women workers into the formal workforce was helpful in achieving high economic growth for East Asian economies. It is a major differentiator for the Bangladesh economy today.

The PLFS is thus a reminder that ensuring access to work outside the home for women must be a priority for high economic growth.