GS Paper III

News Excerpt:

A study by the Indian Institute of Management (IIM) finds that India has witnessed jobless growth, high unemployment among the educated, and low participation of women in the workforce in the last four decades.

Key highlights:

• The study is done by IIM Lucknow in collaboration with researchers from the Birla Institute of Technology and Science, Pilani and the Union Ministry of Agriculture and Farmers Welfare.
• The researchers analysed data from the National Sample Survey Office (NSSO) Employment and Unemployment Survey, and Periodic Labour Force Survey Dashboard for the study.
• The unemployment rate (UR) in the country rises with education level. 
• In 2020–21, for the age group ‘15–29 years’, the UR for the illiterate and less educated class (below primary) was 0.57% and 1.13%, respectively, while for the highly educated class (graduates and above), it was 14.73% 
• Rather than creating more jobs, economic growth has resulted in net labour displacement.
• The country’s economy is witnessing a stagnating employment growth rate, weakening employment elasticity, and structural problems in the labour market, such as low female labour force participation.
• The study points to a surge in output growth and employment from 1987–88 to 2004–05, followed by ‘jobless growth’ from 2004–05 to 2018–19 and a subsequent trifling rebound thereafter.
• Though employing the most youth, the agricultural sector contributed low value-added to the overall economy, resulting in significant employment challenges.
• In 2020–21, the total labour force in India stood at an estimated 556.1 million. Out of this total, 292.2 million (54.9%) were self-employed, 121.1 million (22.8%) were in regular employment, and an estimated 118.6 million (22.3%) were in casual employment. 
• The number of unemployed people declined from 26.4 million in 2019–20 to 24.3 million in 2020–21 in India, while an additional 119 million people were not added to the potential labour force during the same. 
• The estimates show that self-employment has been the chief driver of the Indian job market.
• There is a persistent gender-based disparity in the Labour Force Participation Rate (LFPR) in rural and urban areas, and the decline of LFPR has been higher for females than males from 1983 to 2020–21. 
• The overall female Work Force Participation Rate (WFPR) for those aged 15–59 years in 2020–21 stood at 32.46%, a full 44.55 percentage points below that of men. 
• The total percentage of male WFPR (81.10%) in the same year for those aged 15–59 years is more than twice the rate for female adults (33.79%).
• The new employment structure relies on non-standard types like casual, contract and fixed-term employment, intertwined with social hierarchy and discrimination, resulting in new forms of precariousness and extending general disparity in the labour market.

Remedies suggested in the study:

• The researchers prescribed that a conscious effort to identify and promote the labour-intensive manufacturing sector will help accomplish inclusive growth.
• It will also create high linkage effects, uplifting various industries.
• Alongside the number of jobs created, examining the quality and decency of jobs is equally important, as there is a strong linkage between productivity and job decency.
• The study said the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), public works projects, and poverty alleviation measures have the following favourable influence on the lives and livelihoods of rural people:
• MGNREGA type of public projects tends to drive out private sector employment while raising wages in rural areas by 5%.
• Increase in LFP among females, 
• Improvement in low-caste working bargaining power, 
• Increasing rural wage levels and
• Fall in reliance on high-caste employers.

Conclusion:

The study highlights a concerning trend of joblessness increasing with education levels and low female workforce participation. It calls for promoting labour-intensive manufacturing for inclusive growth, emphasizing job quality, and recognizing the positive impact of MGNREGA on rural livelihoods, suggesting a multi-faceted approach to address employment challenges.