Factors responsible for the increase in employment in India

Source: The post factors responsible for the increase in employment in India has been created, based on the article “Why is India seeing a surge in employment? The answer is not simple” published in “Indian express” on 14th May 2024.

UPSC Syllabus Topic: GS Paper 3- Economy- Employment

Context: The article discusses the growth of employment in India from 1983 to 2023, using NSSO data. It notes increases in jobs across all sectors and highlights significant growth among women and older people. It also points out the rise in self-employment, influenced by government schemes and financial support.

For detailed information on Employment status in India read this article here

What is the status of employment in India?

Consistent Growth in Employment: Employment in India has consistently grown since 1983, with no periods of jobless growth. Notably, from 2017-18 to 2022-23, employment increased by about 80 million, marking a 3.3% annual growth rate.

Significant Inclusion: Women and older individuals have seen significant employment gains, with annual growth rates of 8% and 4.5%, respectively.

Sectoral Expansion: The agriculture and services sectors have experienced the highest employment growth, particularly in non-cropping areas like livestock and fisheries.

Rise in Self-Employment: There’s been a substantial increase in self-employment, supported by government schemes such as the PMMY scheme (Mudra), which disbursed nearly Rs 23 lakh crore up to 2022.

Wage Stagnation: Despite job growth, real wage growth has stagnated, with an average annual increase of just 1.2% after adjusting for inflation from 2017-18 to 2022-23, indicating potential issues with labor supply and productivity.

What factors are responsible for the increase in employment in India?

Government Initiatives: The PMMY (Mudra) scheme significantly contributed to self-employment by disbursing nearly Rs 23 lakh crore into 380 million accounts from 2015-16 to 2022. This financial support helped spur entrepreneurial activities, especially among own-account workers and unpaid family workers.

Demographic Changes: Employment among women and older individuals has increased notably. For women, employment grew by more than 8% annually and for older people (age 60+), by about 4.5% annually. This change is possibly driven by improved access to resources like water and energy, allowing more flexibility to enter the workforce.

Sectoral Growth: The agriculture and services sectors saw the most significant employment gains. Within agriculture, non-cropping sectors like livestock and fisheries experienced the highest growth, suggesting a diversification in agricultural activities beyond traditional farming.

Question for practice:

Examine the factors contributing to the growth of employment in India.