India will have to create 78.5 lakh new non-farm jobs annually till 2030 to meet rising workforce demand despite India’s labour market indicators having improved substantially in the last few years, said the Economic Survey 2024-25 tabled in parliament on Friday.
The Economic Survey also noted that the share of workers in regular and salaried jobs decreased from 22.8 per cent in 2017-18 to 21.7 per cent in 2023-24. The trend has stabilised since 2020-21, with employment levels either holding steady or showing gradual improvement.
On the other side, the proportion of self-employed workers in the workforce has risen from 52.2 per cent to 58.4 per cent in the same period, the Economic Survey acknowledged.
This shift reflects growing entrepreneurial activity and a preference for flexible work arrangements, the Survey suggested.
In the regular wage and salaried employment category, women’s participation decreased. More women graduated towards self-employment or contribute to household enterprises, especially in rural areas.
For instance, in rural India, women’s participation in regular wage jobs fell from 10.5 per cent in 2017-18 to 7.8 per cent in 2023-24, coinciding with an increase in women working as “own account workers/ employers” or “helpers in household enterprises,” the Survey flagged.
In urban areas, salaried employment for women decreased from 52.1 per cent to 49.4 per cent. The bulk of the drop occurred in 2020-21, when it dropped to 50.1 per cent from 54.2 per cent the year before. This was accompanied by a rise in entrepreneurial ventures and flexible work roles.
The decline in casual workers, from 24.9 per cent to 19.8 per cent, also indicates a shift toward more structured forms of self-employment.
On the whole, India has experienced good employment growth in recent years, following the nation’s sustained economic momentum, it stated.
“The 2023-24 annual Periodic Labour Force Survey (PLFS) report by the National Statistical Organisation (NSO) highlights a significant post-pandemic recovery in employment trends across India”, the policy document shared with parliament ahead of the budget presentation said.
The all-India annual unemployment rate (UR) for individuals aged 15 years and above (usual status) has steadily declined from 6 per cent in 2017-18 to 3.2 per cent in 2023-24.
This recovery has been accompanied by an increased labour force participation rate (LFPR) and the worker-to-population ratio (WPR).
Moreover, even under the stricter current weekly status (CWS) criteria, employment levels have rebounded strongly in both urban and rural areas, reflecting a broad-based recovery since the COVID-19 pandemic.
In addition, the quarterly urban unemployment rate (UR) for people aged 15 years and above has shown improvement. The urban UR has dropped from 6.6 per cent in Q2 FY 24 to 6.4 per cent in Q2 FY 25.
This positive shift aligns with a broader strengthening of workforce metrics in urban areas, as the LFPR increased from 49.3 per cent to 50.4 per cent, and the WPR rose from 46 per cent to 47.2 per cent during the same period (Q2 of FY24 to Q2 FY25).
The 2023-24 annual PLFS report highlights encouraging trends in labour market conditions across India. Among the 36 states and union territories, only 12 have a WPR (for all ages) below the national average of 43.7 per cent, and 12 fall short of the national LFPR (for all ages) average of 45.1 per cent.
Further, 14 states have achieved over a 10-percentage point increase in WPR14, and 11 states have recorded a similar increase in LFPR compared to 2017-18.