The seriousness of the problem of unemployment in India


Most indicators of the Indian economy in recent months confirm that it is slowing. There is also a consensus that the economic slowdown is largely a result of weakening demand, most notably in rural areas. While slowing demand has obviously affected the overall growth rate, it has also contributed to declining availability of jobs in an economy already struggling with the spectre of jobless growth.

How serious is the employment problem in India? Official economists and politicians shrug off any such idea of jobless growth with claims of jobs having been created during the previous term of the National Democratic Alliance (NDA) government. However, evidence from multiple sources points to a far more serious crisis of employment generation than is accepted.

The most authoritative source on employment in the country remains the employment-unemployment surveys of the National Sample Survey Office (NSSO). The latest in this series is the Periodic Labour Force Survey (PLFS), the results of which were withheld by the NDA government until the Lok Sabha elections were over. These were released soon after the incumbent NDA won the election. Like most other data, the government tried to tarnish the credibility of the surveys that had been initiated by it and were approved by an expert committee on this matter at several levels. It is important to reiterate that the PLFS estimates are fully comparable to the estimates of employment-unemployment based on NSSO surveys earlier.

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Summary by Maggubhai

  • The slowing India economy caused by weak demand has contributed to job declination in the country.
  • As per the recent Periodic Labour Force Survey (PLFS) released by the National Sample Survey Office (NSSO) the total number of workers has declined in absolute terms for the first time in India.
  • The total number of workers in the economy was 472.5 million in 2011-12, which fell to 457 million in 2017-18 which is a reduction of 15.5 million over six years in absolute terms.
  • Even a similar amount of declination has been confirmed in Annual Employment Surveys by Labour Bureau.
  • The reasons for this declination is mainly due to the fall in the number of workers in agriculture and a sharp fall in the absolute number of female workers.
  • The jobless scenario not only indicates economic slowdown in the country but also political instability.