The National Sample Survey Office (NSSO) released the sixth round of the Periodic Labour Force Survey (PLFS) for 2022-23 on October 9 — the day when the Economics Nobel was awarded to Claudia Goldin for her work on reasons for gender gap in the workplace. Notably, the PLFS for 2022-23, covering the period from July 1, 2022 to June 30, 2023, was processed and published much more quickly than previous reports in the series, with only a 3.25 months’ time lag since the Survey’s completion in June 2023.

There are some clear takeaways. The data has highlighted that since 2017-18 the labour force and workforce in the country are on rise except in the year 2021-22. This shows a good sign for the economy as the employment situation at all India level is improving (Figure 1).

Credit goes to rural India, where both the Labour Force Participation Rate (LFPR) and Worker’s Population Ratio (WPR) are increasing at a faster pace compared to urban India (Figure 2). This faster rise in rural LFPR than urban LFPR especially after the Covid 19 pandemic may be attributed to the reverse migration in the rural areas in the post-pandemic years; many have not gone back to the urban space.

Stagnant in urban areas

That is why the progress in LFPR/WPR is almost stagnant in the urban areas during the post-pandemic years. The all-time rising rural WPR, except year 2021-22, shows that employment is rising in rural areas in the recent years. It is clear that the recent increase in employment is primarily due to the contributions from rural areas.

The second line of inquiry focuses on who is gaining this employment. The overall female WPR reached 27 per cent in 2022-23, up from 16.5 per cent in 2017-18, surpassing the female WPR of 25.9 per cent recorded in 1999-2000, at the turn of the century. This is a cause for celebration, as India has grappled with the issue of low and declining female labour force participation, as reported in the Employment and Unemployment Surveys (EUS) of NSSO’s quinquennial rounds.

The analysis further highlights that employment is growing much faster among the rural female category. In 2019-20, the rural female WPR recorded growth rate of 26.3 per cent over the previous year. The urban female WPR also recorded a growth of 15.9 per cent in the same year. The data clearly depict that more rural females are joining the workforce as compared to rural males, urban males and urban females.

There is, however, concern over rural male WPR as it has recorded negative growth for the last two years. The growth of urban male WPR is also not very welcoming though it is positive. It does not compensate the decline in rural male WPR (Table 1). The increasing female WPR is because of the males seeking better non-farm sector jobs, while females might not be finding suitable non-farm sector employment, leading to their absorption in the agriculture sector. This could be partially a form of distress employment.

The analysis further reveals that employment in the primary sector has increased from 44.1 per cent in 2017-18 to 45.8 per cent in 2022-23. Agriculture, traditionally considered a last resort for sustenance, shows that prior to the Covid pandemic, the Workforce Participation Rate (WPR) in the agriculture sector was declining. However, it increased again during the pandemic.

Source of livelihood

One could argue that the pandemic-induced lockdowns and the second wave of Covid compelled individuals to turn to agriculture as a source of livelihood due to the absence or reduced availability of employment opportunities in other non-farm sectors. This increase in WPR in the primary sector was notable between 2019-2020 and 2020-2021, but it declined again in 2021-22. Nevertheless, in 2022-23, employment in agriculture rose to 45.8 per cent from 45.5 per cent in the previous year (see Figure 3). Self-employment in agriculture has also grown, increasing from 60.4 per cent in 2018-19 to 64.2 per cent in 2022-23.

The secondary sector employment has remained stagnant for quite sometime. However, it has shown marginal improvement (from 24.8 per cent to 25.3 per cent for the same period of 2017-18 to 2022-23).

The employment in services sector has shown a continuously declining since 2018-19 from 32.4 per cent to 28.9 per cent in 2022-23 (Figure 3). This may be attributed to the capital intensive nature of the services sector using 4.0 technologies which are more skill-based and capital intensive in nature, particularly in manufacturing segments. Frequent withdrawals from and increases in the agricultural sector’s workforce clearly indicate that it doesn’t offer sustainable and long-term employment. Those who can’t find better-paying non-farm sector jobs often turn to agriculture as a last resort.

In summary, the employment situation is displaying positive signs, with female LFPR and Worker’s Population Ratio showing an uptrend after decades of shrinking participation in the labour market. This positive trend is evident in both rural and urban locations. Various development programmes for rural India are yielding encouraging results, which are evident in the increasing volume of employment.

Srivastava is faculty at National Institute of Labour Economics Research & Development (under NITI Aayog). Awasthi is faculty at Institute for Human Development

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