Does India have enough jobs for its 1.2 billion people?

The State of Working India reports from the Centre for Sustainable Employment tell us about the nature of the Indian economy.

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The run up to the 2019 general elections saw heated debates around questions of jobs and unemployment. In February 2019, journalist Somesh Jha exposed numbers from the Periodic Labour Force Survey of the NSSO. Unemployment was at an all time high of 6.1 % in 2017 – 2018. With structural transformations of the last two decades across agriculture, manufacturing and industry, successive governments have struggled to create a secure system for income generation. 

Even as the performance of the government on job creation was under scrutiny, labour statistics themselves were, and are, in disarray. The government hid away the results of the PLFS survey until late August 2019, even though the actual numbers about open unemployment were not new or surprising to economists. 

What is the status of labour statistics?

These debates on the status of working India have led to an important, if unusual, conversation on labour statistics in India. The Centre for Sustainable Employment (CSE) posed some pressing questions about this in its report of the State of Working India 2018 (SWI 2018).

The State of Working India 2019 (SWI 2019) by the Centre for Sustainable Employment reports that the Indian economy has been underperforming for some time now. Between 2016 and 2018, there is a decline in the size of the labour force as well as the workforce, and a concomitant increase in the rate of unemployment.

There was a serious paucity of datasets that brought all the information together in one place; the report was imagined as a place for this data to come together”

-Amit Basole, Director, Centre for Sustainable Employment

The report uses the complete NSS rounds of household surveys and sectoral performance at the firm level and in unorganised sectors; data from the Annual Survey of Industries; the 5th round of surveys by the Labour Bureau of the Ministry of Labour; and the and the largest existing dataset on jobs from the Centre for Monitoring the Indian Economy. The data stops at 2015, and the recent phenomena of demonetisation and Goods and Services Tax (GST) have had profound effects on the economy.

The analyses at heart of the report respond to two movements in structural change in the economy. One is the movement from agricultural occupations to non-farm occupations such as manufacturing and services (the Kuznets process’). The other, the movement of the workforce from the organised to the unorganised sector (the Lewis Process’). The report poses the next question: could these new jobs and opportunities see greater social equity, and remain ecologically sustainable in the long run?

The analysis breaks down the profile and structure of the labour force (in terms of age and gender) and various sections of the economy – agriculture, industry, services – to see what creates work and what does not. Finally, it asks why job creation has been weak. The debates that the report spans are regarding the volume of employment, quality, jobless growth and the status of the contemporary Indian labour market. 

The reports work closely with what numbers say, analysing descriptions and trends without going into value-based analyses. The idea of the reports is to have a comprehensive approach that directly engages with all data sets with a continuity.

The number of educated people looking for a job in India are nearly as many as the entire population of the city of Bengaluru.

  • 10% ^ GDP
  • 333 million youth
  • 16% unemployment in youth
  • 36.9% labour force participation

82 % of male and 92% of female workers earn less than Rs.10,000 a month.

  • 1.6% of the Indian workforce earns 50k or more
  • 57% wage earners make 10k a month
  • 46 % Scheduled Castes in leather work

SWI 2018 provides sharp analyses of economic data and lucid commentaries which accord the lay-reader a clear sense of economic ideas and realities at play in India today. It is the first step to contributing to mainstream political discourse and long-term solutions and policies to the problems of unemployment in India, creating a comprehensive overview of the state of labour markets, employment generation, demographic challenges and the nature of growth (SWI 2018).”

In addition to aggregating and analysing data, the report also expands the definitions of key economic terms. From explaining basic economic terms such as principal status’ (having work for more than 6 months a year) and labour force’ (people of working age in paid employment or seeking it), the report seeks to develop data-based pedagogical tools for use in the classroom as well as in other contexts where economic data need to be communicated to broader audiences like journalists and civil society actors.

Unemployment has risen in almost all states across India

The question of employment and the way forward 

The State of Working India 2019 report moves from the examination of what the numbers tell us about employment in India to the question of what can be done about employment generation. As a lower middle income country, there are questions to ask about the status of employment since 2016 when annual surveys on household incomes were discontinued, and there has been a steady decline of jobs coinciding with demonetisation. The key factor around the Indian economy are around what can be done, and the report details policy measures for dealing with the crisis around strengthening jobs. 

The CSE proposes the creation of a National Urban Employment Guarantee Programme that provides a legal right to employment around Universal Basic Services around health, education, safety and mobility. This calls for providing 100 days of guaranteed work at INR 500 a day, applicable in all towns and cities with a population of less than ten lakhs. 

The report concludes that while India has brought down poverty rates, this has not matched an equal growth in jobs. With a large population of youth, there is a need for government policy that can promote robust employment generation. Ultimately”, says the report, the best remedy for alleviating poverty is enough jobs and enough high-quality jobs”.