Why in the News?

The India Employment Report (IER) 2024, brought out by the Institute for Human Development (IHD) and the International Labour Organisation (ILO), has attracted widespread attention.

• The analysis compares four years — 2000, 2012, 2019, and 2022 — which capture the changes over the past 22 years.

Positives in the IER Report, 2024:

• Employment Quality Improvement: The report highlights a robust improvement in employment conditions as indicated by the Employment Condition Index, with an increase in non-farm employment and a decline in agriculture employment, suggesting structural transformation in the economy.
• Female Workforce Participation: There has been a significant increase in the female workforce participation rate, albeit mainly in the agricultural sector and in own-account and unpaid family work. The Female workforce participation (FWFP) rate from 24.5% in 2019 to 37.0% in 2023.
• Labour Market Resilience Amidst COVID: Despite the global slowdown induced by the pandemic, the labor market in India bounced back well, with wages of casual workers increasing, leading to a reduction in extreme poverty and deprivation.
• Unemployment Trends: Unemployment and underemployment rates increased until 2018 but have declined thereafter. The unemployment rate has declined from 6 percent in 2018 to 3.2 percent in 2023.

Challenges as per the IER Report, 2024:

• Emerging Employment Challenges: Challenges include a skewed employment pattern towards agriculture, increasing capital and skill-intensive production processes, low women’s participation, and rising educated youth unemployment.
• Youth Unemployment Focus: The report emphasizes youth unemployment as a principal challenge, especially among educated youth, who account for a significant portion of total unemployment.
• Informal Employment: Despite improvements, the majority of jobs remain informal and of lower productivity, with over 90% of employment being informal and 83% in the informal sector.

Way Forward 

• Policy Recommendations: Policy measures suggested include making production more employment-intensive, improving job quality, addressing labor market inequalities, enhancing skills training, and generating reliable statistics to better understand labor market dynamics.
• Demographic Advantage: India is likely to have a demographic advantage for the next decade, and policy measures are recommended to leverage this advantage for robust economic growth.

Mains PYQ:

Q Besides the welfare schemes, India needs deft management of inflation and unemployment to serve the poor and the underprivileged sections of the society. Discuss.(UPSC IAS/2022)

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