As Covid wanes, India’s high-frequency indicators suggest that economic activity is normalising quickly, with high-contact services such as trade, hospitality and travel being the latest to revive. NSO’s latest Periodic Labour Force Survey (PLFS) for the April-June quarter of 2022 shows that the growth revival is reflecting in urban job creation. The job losses witnessed during peak Covid are now a thing of the past with key metrics such as the all-India unemployment rate, Worker Population Ratio (WPR) and Labour Force Participation Rate (LFPR) back to pre-Covid levels. About 43.7 per cent of India’s population aged 15-plus was in the workforce just before Covid hit, in January-March 2020. The lockdown levelled this to 36.4 per cent, but the ratio bounced back to 43.9 per cent by April-June 2022. The unemployment rate, which had spiked from 9.1 per cent before the pandemic to 20.8 per cent during the lockdown, fell back to 7.6 per cent in April-June 2022, suggesting that the economy has recouped urban jobs lost during Covid and then, some more.
While the headline numbers are heartening, granular findings suggest some structural changes in employment which are not as positive. One, Covid has widened the yawning male-female divide in India’s workforce. Though both men and women suffered big job losses during the lockdown, men have found it easier to resume employment. The unemployment rate for women in April-June 2022 at 9.5 per cent stood much higher than 7.1 per cent for men. While the proportion of working men in the 15 plus age group has increased from 67.3 per cent pre-Covid to 68.3 per cent now, just 18.9 per cent of the women are employed today compared to 19.6 per cent before. It needs to be investigated if Covid has led to permanent job losses in sectors where women usually find employment. Two, before Covid 35.5 per cent of India’s workers were in family enterprises, 38.3 per cent were self-employed and 50.5 per cent held salaried jobs, while 11.2 per cent worked as casual labour. The lockdown dealt a big blow to family enterprises and casual work. While casual jobs have bounced back post-Covid (12.1 per cent in April-June 2022), a lower proportion of workers now seem to be in salaried jobs (48.6 per cent), while family firms (38.6 per cent) and self-employment (39.2 per cent) have seen an increase. This could indicate disguised unemployment or lower wages.
The NSO deserves praise for reducing the time lag between the completion of this survey and its release to just 2 months compared to the delay of 9-12 months earlier. This improves the usability of the data. But the quarterly PLFS does leave important questions about state of employment unanswered. As it surveys urban workers alone and not rural ones (they feature only in the annual PLFS), it does not help gauge if rural jobs have recovered at the same pace as urban ones. PLFS captures employment based on the current weekly status reported by workers and therefore captures the supply side of the labour market, without touching on the demand side. Data on whether industry and services are creating enough new jobs is a critical input to gauging if India is indeed capitalising on its demographic dividend. The survey’s design also needs to evolve with the changing nature of workforce in the economy, from manufacturing to services, from full-time to gig work. One hopes NSO will take up work on the above datasets in future.