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News: Data from various employment surveys indicates that India’s growth model is in trouble.
On what basis it is said that India’s growth model is in trouble?
Labour participation has dropped: The recent data from the Centre for Monitoring Indian Economy (CMIE), suggests that, the labour participation rate has slipped for consecutive months.
As per CMIE, pandemic has made a structural transformation in India’s labour participation rate, bringing it down by 3 percentage points to 40%. This is well below comparable levels, including in other middle-income developing economies.
Concern about the quality of jobs available: The CMIE data suggests that job growth in recent times has been concentrated in rural areas, and salaried jobs have been falling.
This is particularly disappointing, given the aspirations of India’s youthful workforce for such jobs.
Thirdly, the revelations from the Periodic Labour Force Survey (PLFS) is in line with the findings of CMIE. PLFS data has made the following revelations
– The proportion of the non-agricultural workforce in the informal sector went up to nearly 70 per cent.
– There has been a notable increase in those who are working without pay for household enterprises.
– The workers in agriculture had, for the first time in recent memory, increased.
What is the way forward?
Short term measures: increase in welfare measures and social protections.
Long-term measures: sustained increases in productivity, wages, and job security for the vast mass of Indians
Source: This post is based on the article “India’s labour market distress” published in Business Standard on 8th Dec 2021.
