Statsguru: Jobs situation before Covid-19 hit India's slowing economy

FOR MANY YEARS, India did not have uniform high-frequency jobs and unemployment data: The National Statistical Office surveyed employment data once in five years, while the Labour Bureau’s annual surveys were discontinued in 2015. The Periodic Labour Force Surveys (PLFS) that began in 2018 changed this by offering employment data on a quarterly basis, though with a lag.

The most recent data pertains to the July-September 2019 quarter. At that point of time, India’s gross domestic product growth was on a decline for more than a year. Despite the worsening economic conditions, the PLFS shows that the unemployment rate actually fell in that period. For people above 15 years of age, it dropped from 9.6 per cent in July-September 2018 to 8.3 per cent in the same period of 2019, shows chart 1.

But the same chart also shows that joblessness is worse for the 15-29 age group, compared to the larger 15+ group, suggesting that those entering the working age are probably the most precarious among all.

From that period to now, data from the Centre for Monitoring Indian Economy shows that unemployment is lower than a year ago, after a big jump during the lockdown (chart 2). But a critical point about the job scene in India is the low labour force participation (LFP), and the PLFS’ latest round underlines this. Chart 3 shows less than 50 per cent of the working-age group works or wants to work. The LFP is not rising significantly.

LFP across economic sectors gives another insight, which, to some extent, is expected. The share of manufacturing in the workforce has been declining (chart 4) over the five tranches of quarterly PLFS data. Manufacturing output also declined in that period.

The next two charts show the state-wise status of two indicators discussed above: Labour force participation and unemployment. One of the poorest states in India, Bihar has only a quarter of its population in the labour force. The Opposition parties in the state are thus promising a million jobs to the populace in the upcoming polls. Tamil Nadu and West Bengal have the best LFP among states, chart 5 shows.

While industrialised states show a lower rate of joblessness, Kerala stood at the bottom there, chart 6 reveals.

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