Published 17:40 IST, July 8th 2024
Labour Ministry rebuts Citigroup’s report on India's employment outlook
The ministry highlighted that from 2017-18 to 2021-22, India generated over 8 crore employment opportunities, averaging more than 2 crore jobs per year.
The Ministry of Labour and Employment has countered a recent Citigroup report predicting that India will struggle to create sufficient employment opportunities, even with a 7 per cent growth rate.
In a statement on Monday, the ministry criticised the report for not considering comprehensive employment data from official sources such as the Periodic Labour Force Survey (PLFS) and the Reserve Bank of India’s KLEMS data. According to the ministry, these sources indicate a far more positive employment scenario than what Citigroup suggested.
The ministry highlighted that from 2017-18 to 2021-22, India generated over 8 crore (80 million) employment opportunities, averaging more than 2 crore (20 million) jobs per year. This includes the period affected by the COVID-19 pandemic, which contradicts Citigroup's assertion of India's employment struggles.
Government initiatives aimed at boosting employment across sectors have been effective, according to the statement. The Annual PLFS report shows improving trends in key labour market indicators such as the Labour Force Participation Rate (LFPR), Worker Population Ratio (WPR), and Unemployment Rate (UR) for individuals aged 15 years and above from 2017-18 to 2022-23.
The WPR increased from 46.8 per cent in 2017-18 to 56 per cent in 2022-23, and the LFPR rose from 49.8 per cent to 57.9 per cent in the same period. The Unemployment Rate dropped from 6 per cent in 2017-18 to 3.2 per cent in 2022-23. The PLFS data indicates that more employment opportunities have been created than the number of people entering the labour force, leading to a consistent reduction in the unemployment rate.
Contrary to Citigroup’s report, the official data paints an optimistic picture of the Indian job market. The ministry also pointed out that formal sector employment figures have been bolstered by government efforts to improve the ease of doing business, enhance skill development, and provide incentives for job creation in both public and private sectors.
EPFO data shows an increase in formal job creation, with over 1.3 crore subscribers joining EPFO in 2023-24, more than double the 61.12 lakh who joined in 2018-19. Since September 2017, more than 6.2 crore net subscribers have joined EPFO.
The ministry criticised the use of private data sources, which the report and media often refer to as more reliable, stating these sources have several shortcomings. These surveys use their own definitions of employment and unemployment, which are not aligned with national or international standards. The sample distribution and methodology of these surveys are often critiqued for not being as robust or representative as official data sources like PLFS.
Relying on private data sources over official statistics can lead to misleading conclusions, the ministry warned. It emphasised the credibility and comprehensiveness of official data and cautioned against the selective use of private data sources, which can undermine the credibility of their analysis.
The ministry underscored that official data sources like PLFS, RBI, and EPFO show consistent improvements in key labour market indicators, including increased LFPR and WPR, and a declining Unemployment Rate over the last five years.
The government remains committed to creating a robust and inclusive job market, with substantial progress evident in the data, the ministry stated.
(With PTI inputs)
Updated 17:40 IST, July 8th 2024