India Employment Report 2024

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Context:

• The India Employment Report 2024 has been released by the International Labour Organisation (ILO).

Employment Scenario in India - ILO Report

Grim Employment Landscape

• Unemployment Trends: Between 2000 and 2018, India experienced a worrying trend in its employment landscape, characterized by a deterioration in various key labor metrics.
• Youth Unemployment: Nearly 83% of the unemployed population in India comprises young individuals, highlighting a significant challenge in harnessing the potential of the country's youthful demographic.
• Educational Disparities: The proportion of unemployed youth with secondary or higher education nearly doubled from 35.2% in 2000 to 65.7% in 2022, indicating a mismatch between skills and job market demands.

Long-term Deterioration and Recent Improvements

• Labour Market Indicators: The Labour Force Participation Rate (LFPR), Worker Population Ratio (WPR), and Unemployment Rate (UR) exhibited a prolonged decline from 2000 to 2018, indicating systemic challenges within the labor market.
• Recent Trends: However, there has been a slight improvement observed after 2019, coinciding with periods of economic distress. This improvement, though noteworthy, raises questions about its sustainability and the underlying drivers.

Paradoxical Improvements

• Sectoral Imbalances: Despite the higher growth rate of non-farm employment compared to agriculture, the non-farm sectors have struggled to absorb workers adequately, perpetuating the issue of underemployment.
• Informal Sector Dominance: Informal employment remains pervasive, engaging approximately 90% of the workforce. However, the share of regular employment, which exhibited growth until 2018, has been on the decline thereafter.
• Contractualization: There has been a concerning rise in contractualization, with only a small percentage of regular workers benefitting from long-term contracts, contributing to increased job insecurity.

Skill Gap and Gender Disparities

• Skills Deficiency: A significant proportion of the youth lacks essential skills demanded by the job market. For instance, a considerable percentage struggles with basic computer tasks such as sending emails, copying files, and using spreadsheets.
• Gender Disparities: The labor market in India continues to grapple with substantial gender disparities, particularly evident in low rates of female labor force participation and high unemployment rates among highly educated women.
• Social Inequalities: Despite affirmative action measures, marginalized groups such as Scheduled Castes and Scheduled Tribes face persistent challenges in accessing quality employment opportunities, leading to a perpetuation of social hierarchies.