Getting real on jobs

| Updated on November 20, 2020

Covid impact may have been contained, but credible, dynamic jobs data gathering is called for

Alongside other macro data that are flashing signs of recovery, employment numbers in India have also rebounded strongly, partly due to the measures taken by the government. But while the headline numbers are positive, there are some long-standing issues in the job scenario that remain unaddressed. The numbers put out by the Centre for Monitoring Indian Economy (CMIE) show that the combined (rural and urban) unemployment rate in October was lower at 6.98 per cent compared to 8.75 per cent in March. The number had climbed up to 23.5 per cent in April when the country was in the throes of the pandemic-induced lockdown, but the measures taken by the Centre along with the recovery in activity seem to have contained it. These numbers are corroborated by EPFO data, which indicate that the job losses in the organised sector were severe in April and May, but there was an improvement thereafter. Net new EPF subscribers improved from 93,166 in April to 7,50,000 by July.

The stimulus measures announced to fight the pandemic seem to have impacted employment positively. The Pradhan Mantri Rojgar Protsahan Yojana, where the Centre has promised to pay the contribution towards EPF and EPS for new employment, is reported to have benefited 1.21 crore people in 1.5 lakh establishments. The extension of this scheme in the latest stimulus measures will provide jobs to those in the lower-income bracket in the organised sector. Increasing the allocation towards MNREGA by an additional ₹50,000 crore for FY21 may have helped migrant labourers returning to their villages find employment. Data show that sectors such as building and construction, schools, trading and hospitality witnessed the most job losses in April and May. But the recovery in activity has helped stem further job losses in these areas.

However, the Centre should not rest on its laurels. CMIE’s widely followed number reflects unemployment among those who are willing to work and actively looking for employment. But India’s labour force participation rate on the whole is very poor and has been steadily declining over the past decade from 54 per cent in 2010 to 49.16 per cent now. This is among the lowest within emerging economies. According to the latest numbers, women’s participation in workforce is less than 20 per cent in both rural and urban areas, while for men it is around 55 per cent. Cultural and social constructs need to be addressed. Dynamic jobs data are an essential input for fiscal and monetary policy making. The Labour Ministry should resume its post-GFC exercise of carrying out quarterly employment surveys across major sectors.

Published on November 20, 2020

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