India’s Employment Data: A Closer Look

India’s employment data has been a topic of debate among economists, with many questioning the accuracy of the numbers. According to official figures, the country’s employment rose by 46.7 million in the fiscal year that ended in March 2024, taking the total to 643.3 million. However, experts argue that this increase is largely due to self-employed individuals, unpaid workers, and temporary farm hires, which are not equivalent to formal jobs with regular wages.

Amit Basole, head of the Centre for Sustainable Employment at the Azim Premji University, points out that the jump in employment cannot be equated to the creation of formal jobs with regular wages. He notes that the increase is largely coming from agriculture and self-employment, which includes own account work or unpaid family work. “I wouldn’t call them jobs,” he says. “They’re just people working in agriculture or in non-farm self-employment because of lack of adequate demand for workers from businesses.”

The Reserve Bank of India’s database shows that agricultural work opportunities contributed 48 million of the 100 million jobs generated between financial years 2017/18 and 2022/23. However, Basole emphasizes that these jobs are not formal and do not provide regular wages. “What is clear is that there is a large increase coming from agriculture and from self-employment, which includes own account work or unpaid family work,” he says.

The central bank’s provisional estimate of the increase in employment in 2023/24 does not provide details on the sectors that saw these additions. The data available up to the previous year shows that the majority of the jobs generated were in agriculture and self-employment.

Prime Minister Narendra Modi’s government has faced criticism for failing to deliver on its promise of creating 20 million jobs a year. Modi’s party manifesto for this year’s general election promised to create jobs through investments in sectors such as infrastructure, pharmaceuticals, and green energy. However, the party’s failure to win an absolute majority on its own was blamed on voters’ disenchantment with lack of jobs and high inflation.

India’s former chief statistician, Pronab Sen, questions the accuracy of the employment data, saying that the bulk of the increase has come in agriculture and casual work. “Growing farm employment was ’extremely regressive’ as it went against the nation’s goal of moving more Indians away from agricultural work,” he says.

Economists have pointed to weak consumption in the economy, which grew by just 4 per cent in 2023/24, or half the pace of gross domestic product (GDP) which expanded at a world-beating 8.2 per cent. Rupa Rege Nitsure, an independent economist, notes that if enough employment is being generated, then enough income should get generated and that should get translated into higher consumption at a broad-based level. However, the unevenness in consumption spending suggests otherwise.

In conclusion, India’s employment data requires a closer look to understand the reality of the situation. While the numbers may show an increase in employment, the quality of jobs generated is a concern. As students preparing for competitive exams, it is essential to analyze the data critically and understand the nuances of the employment market in India.

Historical Context:

• India’s employment data has been a topic of debate among economists for several years, with concerns about the accuracy of the numbers and the quality of jobs being generated.
• In 2019, the Indian government launched the “Make in India” initiative, aimed at creating jobs and boosting the manufacturing sector. However, the initiative has been criticized for its slow progress and lack of tangible results.
• In 2020, the COVID-19 pandemic hit India, leading to widespread job losses and economic uncertainty. The government responded with various stimulus packages and job creation schemes, but the impact on employment has been limited.
• In 2022, the Indian government launched the “Atmanirbhar Bharat” (Self-Reliant India) initiative, aimed at promoting domestic manufacturing and reducing dependence on imports. However, the initiative has been criticized for its lack of clear targets and timelines.

Summary in Bullet Points:

• India’s employment data shows an increase of 46.7 million jobs in the fiscal year that ended in March 2024, taking the total to 643.3 million.
• Experts argue that the increase is largely due to self-employed individuals, unpaid workers, and temporary farm hires, which are not equivalent to formal jobs with regular wages.
• The Reserve Bank of India’s database shows that agricultural work opportunities contributed 48 million of the 100 million jobs generated between financial years 2017/18 and 2022/23.
• The majority of the jobs generated were in agriculture and self-employment, which includes own account work or unpaid family work.
• Prime Minister Narendra Modi’s government has faced criticism for failing to deliver on its promise of creating 20 million jobs a year.
• Economists have pointed to weak consumption in the economy, which grew by just 4 per cent in 2023/24, or half the pace of gross domestic product (GDP) which expanded at a world-beating 8.2 per cent.
• The unevenness in consumption spending suggests that the employment data may not be as rosy as it seems, and that the quality of jobs generated is a concern.
• India’s former chief statistician, Pronab Sen, questions the accuracy of the employment data, saying that the bulk of the increase has come in agriculture and casual work.
• Economists argue that the employment data requires a closer look to understand the reality of the situation, and that the quality of jobs generated is a concern.