The Ministry of Labour and Employment on Monday rebutted a research report by Citigroup questioning India’s capacity to create sufficient employment opportunities even with seven per cent growth rate, and said the report had failed to use official data such as the Periodic Labour Force Survey (PLFS) and the Reserve Bank of India’s KLEMS data.
In a rebuttal, the Ministry said the report, quoted by some of the print and electronic media, had failed to “account for the comprehensive and positive employment data available from official sources.” The Ministry said it “rebuts such reports which do not analyse all official data sources available in the public domain.”
The Ministry said according to PLFS and RBI’s KLEMS data (which provides insights into five key inputs in production—capital (K), labour (L), energy (E), materials (M) and services (S) ), India has generated more than eight crore (80 million) employment opportunities from 2017-18 to 2021-22. This translates to an average of over two crore (20 million) employment per year, despite the fact that the world economy was hit by Covid-19 pandemic during 2020-21.
These figures contradict Citigroup’s assertion of India’s inability to generate sufficient employment, the Ministry said. This significant employment creation demonstrates the effectiveness of various government initiatives aimed at boosting employment across sectors.
The Annual PLFS report depicts an improving trend in labour market indicators related to: (i) Labour Force Participation Rate (LFPR), (ii) Worker Population Ratio (WPR) and (iii) Unemployment Rate (UR) for persons of age 15 years and above during 2017-18 to 2022-23. For instance, the WPR i.e. employment has increased from 46.8 per cent in 2017-18 to 56 per cent in 2022-23.
Similarly, the labour force participation has also increased in the country from 49.8 per cent in 2017-18 to 57.9 per cent in 2022-23. The Unemployment Rate has declined from 6.0 per cent in 2017-18 to a low of 3.2 per cent in 2022-23.
The PLFS data shows that during the last five years, more employment opportunities have been generated compared to the number of people joining the labour force, resulting in a consistent reduction in the unemployment rate.
This is a clear indicator of the positive impact of government policies on employment. Contrary to the report, which suggests a dire employment scenario, the official data reveals a more optimistic picture of the Indian job market, the Ministry said.
The formal sector employment figures are also being bolstered by government efforts to improve ease of doing business, enhance skill development, and provide incentives for job creation in both the public and private sectors.
The EPFO data suggests that more and more workers are joining formal jobs. During 2023-24, more than 1.3 crore subscribers joined EPFO which is more than double compared to the 61.12 lakh workers who joined EPFO during 2018-19. Moreover, during the last six and half years (since September, 2017 to March, 2024) more than 6.2 crore net subscribers have joined the EPFO.
The data from the National Pension System (NPS) indicates that more than 7.75 lakh new subscribers have joined the NPS during 2023-24 under the Central and State governments which is 30 per cent more than 5.94 lakh new subscribers joining NPS under government sector during 2022-23.
This substantial increase in the new subscribers highlights the government’s proactive measures to fill-up the vacancies in the public sector in a timely manner.
In a recent interaction of Indian Staffing Federation (ISF) members with the Secretary, Ministry of Labour and Employment, the ISF members informed that they are employing about 5.4 million formal contract workers.
“The Ministry of Labour and Employment emphasises the credibility and comprehensiveness of official data, cautioning against the selective use of private data sources that can lead to misleading conclusions about India’s employment scenario,” the Ministry stated.