It is around 10 a.m. in the morning and Manoj Mandal, 38, and about 50 other people are still waiting for the day’s job at a labour chowk in Bhogal in central Delhi.

“Kaam down chal raha he (There is less work). It’s already 10 and now chances are less that anyone will come here to call us for work today,” Mr. Mandal said, as others around him nodded in agreement.

Even through the Central Government’s data shows that Delhi is among the top five states performing well in terms employment rates, interviews with workers, students, government officials, and experts paint a different story of unemployment and job insecurity.

The Central data showed that Delhi’s unemployment rate (UR) – almost halved in just three months from earlier this year and the state had the lowest unemployment in the country. But officials and experts told The Hindu this was not possible.

The latest annual report by the Central Government show that unemployment rate of Delhi increased slightly to 2.1% from 1.9%.

Actions by the state government to generate jobs is also next to nothing, amidst a long-standing power tussle between the elected AAP-led Delhi government and the Central Government-appointed Lieutenant Governor, which has stopped many projects in the national capital.

When asked about the distress on the ground, though Delhi is one of the better off states as per Government data, Arun Kumar, former Professor (Economics) at the Jawaharlal Nehru University (JNU) said, “There is distress of unemployment across the country. PLFS data includes unpaid work also whereas ILO definition of UR only considers paid work. So, the PLFS data does not accurately capture the state of unemployment.”

Santosh Kumar Mehrotra, a visiting professor at the Institute for Policy Research, University of Bath, U.K., also said that there is a lot of distress due to unemployment and underlined that the ILO calculation was better.

Curious case of unemployment data

As per the Central Government’s Periodic Labour Force Survey (PLFS), Delhi’s unemployment rate (UR) fell drastically to 1.8% in January-March 2024, from 3.3% in October-December 2023. While at the national level it increased to 6.7% from 6.5%, for the same time period.

Commenting on the huge fall, Surajit Mazumdar, a professor at Jawaharlal Nehru University (JNU) said that Delhi’s unemployment situation could not be drastically different from the rest of the country.

One plausible explanation is that the Relative Standard Error (RSE) for Delhi’s UR is 18.2%, as per the PLFS data, whereas the RSE at the national level is only 2.7%. But there are three other states with a higher RSE than Delhi, the data shows.

“At the state level, the sample sizes are very small and the chances of inaccuracies in estimates increase. That is why state RSEs are significantly higher than all of India,” Professor Mazumdar said.

A Labour Department official also said that Delhi’s UR could not fall so sharply in just three months, as there were “no big employment generation by the private sector or Government”.

But in the next quarter (April-June 2024), the UR for Delhi increased to 2.5% from 1.8%.

But the annual data for (July 2023 – June 2024), show that the UR for Delhi increased to 2.1% from 1.9% in the previous annual PLFS report. While at the national level, the UR was stagnant at 3.2%.

One reason for this inconsistency in the quarterly and annual data is because both are calculated differently.

In quarterly reports, while calculating the UR, the Government considers ‘current weekly status’ (CWS), which considers seven days preceding the date of survey.

While in the annual reports, what is popularly considered as the UR is ‘usual status’, which considers 365 days preceding the date of survey.

Though the annual report also has the UR data as per CWS, the Government considers the ‘usual status’ data prominently as the UR in their statements. The recent annual report shows that the UR data as per CWS is higher than the UR calculated based on ‘usual data’.

But both Mr. Kumar and Mr. Mehrotra said that the UR calculated as per CWS is a more accurate representation.

Grim placement situation

Mr. Mandal, who hails from West Bengal, has been living in Delhi for 20 years. He said that there was more work before COVID-19 pandemic and now more people head home without work. His concerns were echoed in another labour chowk in Old Delhi too.

But in Delhi, it’s not just daily wagers scrambling for jobs.

Rohan (name changed), from Bihar, moved to Delhi for his Master’s, with hopes of “better job prospects”. A year after he completed his Master’s in Economics from JNU in 2023, he got placed at an MNC, only to have his dreams shattered earlier this year.

“Around 15 of us were placed in the same company. But they kept deferring our joining date and eventually, they revoked all the offers as the economy was bad…” says a dejected Rohan, now aged 24, who wants to “move away from the corporate sector”, and pursue research instead.

This isn’t Rohan’s story alone. Every year, lakhs of students come to reputed universities in Delhi, from across the country, in the hopes of coming out of their cycle of poverty. In recent years, many have ended up in a cycle of unemployment instead.

The large number of people coming to Delhi led to the national capital having the highest population density in the country in 2011.

Multiple students in DU said that they do not get to know about placements, as few companies come looking only in specific subjects.

In JNU, professors said that most placements take place at the department level and many students said that their placement cell is “barely functional”.

The DU’s Central Placement Cell places a few thousand students every year, but this is only a small percent of the total students enrolled in the university. Many students, however, are applying for the Vice-Chancellor internship scheme and the PM internship scheme, saying that there are hardly any jobs for them.

“It is not possible to place thousands of students, hence placements take place at the college level too,” a university official said, adding that placements took a hit during the pandemic.

Meanwhile, at IIT Delhi, officials said that the slight drop in placements this year was reflective of the economic situation. After the commencement of the placement process, an official said, “Compared to the last year where we had around 1287 offers, we had 1215 offers this year”. He added, “Despite the fact that it was a difficult year, we were almost able to match up to the number of offers last year.” However, officials did not share the number of students registered for placements.

Jobs lost during pandemic

The pandemic, not only impacted college placements, but hit other sectors too. Over the past few years, many have been pushed down from a formal job into the gig economy as delivery agents and cab drivers.

Paritosh Sagar, 42, lost his clerical job in a private company during the first wave of the pandemic. After a desperate job search, he began working as a bike-taxi rider for multiple companies such as Ola and Uber.

“I preferred the office job because I have knee pain. But now for around 10-12 hours of harder physical work a day to earn Rs. 30,000 a month,” he said. But from this he has to pay EMI for his bike every month, leaving him with little savings.

No relief from Government

Over the years, the Aam Aadmi Party (AAP) chief Arvind Kejriwal has been claiming in several election-bound states that they gave 10-12 lakh jobs in Delhi and promised to generate such employments in the other states.

Ten lakh of these jobs were claimed to be generated from a “Rozgar Bazaar” online portal of the Delhi government. However, an RTI by The Hindu last year showed that the department did not have any data on number of people who got jobs through the portal.

The Delhi government in its annual budget announced in March 2022 promised 20 lakh jobs over the next five years, of which five lakh were supposed to come from a Rozgar Bazaar 2.0 portal.

“The original Rozgar Bazaar portal has been non-functional for over a one and a half years now and the plan for Rozgar Bazaar 2.0 portal is also stuck,” a Delhi government official told The Hindu.

The Delhi government is not holding job fairs too, as issues were raised about money spent on previous job fairs, according to officials.

“Last time we held a job fair, we had to do it of our own without any help from the Labour Department. Officials do not listen to us as they know that we cannot suspend or even transfer them as the L-G has all the powers,” an AAP leader said.

Many government schemes have been affected in Delhi as the turf war between the AAP and L-G continues.

Aspirants wait to board a train to go home after completing the Uttar Pradesh constable civil police direct recruitment examination in Lucknow. File
| Photo Credit: The Hindu

India is not producing enough good quality jobs for its people. A good quality job provides dignity, adequate compensation, an opportunity for learning, and advancement for those who strive. Instead, many jobs are unpaid, informal, and dead end. Worse, the seemingly low unemployment rate masks the fact that to count as employed, a person needs to have reported working for only one month in an entire year.

The dearth of quality employment, particularly among the youth, is a ticking time bomb that threatens not just our economy, but the very legitimacy of our state. If the government fails to create avenues for social and economic participation for young people, it will inevitably breed frustration.

A twofold problem

The political problem is twofold: how do we give people a sense of dignity and purpose, and the means for financial support? Traditionally, people have derived dignity and purpose through a combination of community, work, and political engagement. However, the package deal of liberalism and capitalism have deprioritised traditional sources of community and increased the importance of work in conferring social standing and belonging. As a result, work has become the dominant entry point into a broader sense of community and political engagement.

While the elite find purpose and status through their control over societal discourse and decision-making, which also bring them substantial financial rewards, large sections of our population feel they lack both dignity and financial security. This disparity is likely to worsen as technological advancements and capital concentration potentially displace large numbers of workers, perhaps permanently. In a large democracy such as India, such concentration of purpose and financial gain among the elites can erode faith in the system and lead to political instability.

This challenge — how we structure our society, what we value, and how we include everyone — is fundamentally political. Yet, the political response has been inadequate, oscillating between deferring to market forces and resorting to short-term partisanship. The market-oriented approach is reflected in the superficial mantra of ‘creative destruction,’ suggesting that old jobs and industries will be seamlessly replaced by new and better ones. Meanwhile, some politicians and capitalists have mooted universal basic income (UBI) as a solution. UBI is a minimum “income” received by all citizens of a given population as financial transfers from the government without having to work.

Setting aside the question of UBI’s financial feasibility, it is important to recognise that inequality and an assault on human dignity are inherent in the very concept. UBI implies that a significant portion of the population is no longer needed in the economy, with a smaller subset “paying” for the rest. Its very premise concedes that technology and capital will create outsized winners while the majority will merely survive on their largesse. This approach fails to address people’s need to feel relevant and capable, and ignores the loss of dignity that comes from not contributing meaningfully to society. It does not, thus, account for the possibility that UBI might encourage more anger and populism because people want to contribute and thrive, not just survive on the sidelines.

There is a risk to democracy as a whole as well. UBI would shift focus from structural reforms to mere economic transfers and thus entrench elite power by insulating them from pressures to address fundamental inequities in the economy and labour markets. It risks recasting the state as a mere distributor of funds rather than the architect and arbitrator of societal processes required to create a just and participatory social and economic system.

Addressing structural issues

The partisan response has been to lob the issue between parties for short-term electoral gains instead of responding to the ongoing structural transformation of our society. Some political leaders are mindful of the long term, but institutionally, parties have become too narrow in their scope to address larger questions such as unemployment and have reduced their ambitions to winning elections alone. However, divesting societal issues to civil society or government in order to function solely as election-winning machines jeopardises their long-term legitimacy. This is because democracy is about more than elections — it is about creating a social contract that works for everyone.

In fact, the failure to anticipate and address long-term structural issues is a key reason why people feel neglected by the political class and view politics as a cynical game. When people believe the political system is incapable of addressing pressing challenges, they lose faith in democratic institutions. Thus parties and institutions must find ways to address structural issues, including unemployment, inequality, and dignity; else, people will seek alternatives, rendering political parties irrelevant. We are witnessing this globally through the rise of populism, authoritarianism, and civic disengagement.

Political parties must provide meaningful leadership by addressing structural issues head-on without resorting to deflection or partisanship. The future of Indian democracy — and the continued relevance of our political institutions — hinges on our ability to restore a broader sense of public purpose and economic participation to the centre of our national dialogue.

Ruchi Gupta, Executive Director of the Future of India Foundation, which anchors an initiative to harness the political process to create aspirational employment opportunities for youth at the district level

Tamil Nadu fares better than most States on employment metrics, but more must be done to tackle underemployment and gaps between skills and education, as the State produces the highest number of graduates in India.

While there is no accurate data to measure India’s employment scenario, the periodic labour force survey (PLFS) conducted by the Union Ministry of Statistics and Programme Implementation offers some insights.

The annual PLFS from July 2022-June 2023 measured different aspects of employment across States and nationwide. Among the sample population, it considered the activity in which a person spent relatively long time during 365 days preceding the date of survey as the principal activity status, while the economic activity performed for 30 days or more, adding to the principal status was considered the subsidiary economic status.

Also read | 42% of women working in India’s factories reside in Tamil Nadu: Stalin

Put together the principal and subsidiary economic status, that is, Tamil Nadu’s (T.N.) labour force participation rate (LFPR), which is the percentage of persons in the labour force – those working, or seeking, or available to work – was 46%, compared with 42.4% nationally. 

More women workers

Under the principal plus subsidiary status, the percentage of employed persons, or Worker Population Ratio (WPR) in T.N. was 44%, compared with 41.1% nationally. The female WPR was 31.6%, higher than the 27% nationally.

In T.N. 31.6% earned a regular wage, compared with 20.9% nationally.

The unemployment rate among the educated, that is, those who have attained secondary level education, was 9.4% in T.N., compared with 7.3% nationally. The unemployment rate among graduates was 16.3% in the State, higher than 13.4% at the all India level, and the youth unemployment rate (15-29 y/o) was 17.5% for T.N., significantly more than the nationwide 10%.

PLFS also measures the workforce according to the current weekly status (CWS) approach, which considers those who worked for at least one hour, or was seeking/available for work for at least an hour on any day in the past week preceding the survey date. As per this metric, T.N.’s LFPR was 44.5%, compared with 40% as the national average, while WPR was 41% against the national level of 38%.

T.N.’s unemployment rate going by the CWS approach, was 7.9%, against 5.1% nationally.

The PLFS considers proprietary and parT.N.ership enterprises as the informal sector. On that basis, informal workers were 65.7% in T.N., against 74.3% nationally. T.N.’s unemployment rate was 4.4%, compared with 3.2% nationally in this segment.

Also read |  T.N. finalising Employment Policy

One of the ways to assess employment in the formal sector is to consider net Employees’ Provident Fund Organisation subscriber additions. Maharashtra, Karnataka, Tamil Nadu, Gujarat and Haryana combined constituted around 58.24% of net addition in the month of May 2024, the Union government said.

T.N. has the highest number of factories in India. More than 40% of factory employment was in Tamil Nadu, Gujarat, and Maharashtra combined, according to the Economic Survey 2023-24. But the highest employment growth between FY18 and FY22 was seen in states with a higher share of young population, which included Chhattisgarh, Haryana and Uttar Pradesh, according to the Survey.

The DMK government has said it has attracted investments of more than ₹10 lakh crore and created about 31 lakh jobs in the past three years. In June, Chief Minister M.K. Stalin told the Assembly that his government would fill more than 75,000 vacancies across government departments within 18 months.

He also said 65,483 youths have been hired hired across departments in the past three years, while overall the state government has ensured jobs for 5,08,055 people.

A. Kalaiyarasan, an economist with the Madras Institute of Development Studies said T.N. has more unemployed graduates due to the higher gross enrolment ratio (GER).

More graduate numbers

T.N.’s GER in higher education is almost double the national average, according toa 2024-25 State Higher Education Department policy note, which quoted the All India Survey on Higher Education (AISHE).

“Our youth enrolment in education is not keeping pace with the employment opportunities. So some youth end up working in the gig economy like Swiggy and other e-commerce sites, hoping to land a better job in future,” Mr. Kalaiyarasan said.

Despite T.N. having the highest women workforce participation, Mr. Kalaiarasan said wage discrimination must be addressed. He pointed to the monthly earnings gap between men and women, with women in regular jobs earning ₹12,969 against ₹17,476 for men in 2020-21.

Mr. Kalaiyarasan also said T.N. must incentivise employment generation over capital investments.

‘Incentivise labour’

Srivats Ram, Chairman, Confederation of Indian Industry (CII), T.N. State Council said historically, industrial promotion schemes incentivised based on the amount of capital or investment being deployed. But now this is shifting toward attracting labour intensive sectors like electronics, non-leather footwear, etc, he said.

Mr. Ram also warned of the skill gap among recent graduates, making them hard to be placed at jobs immediately pointing to the need for more training programmes. “Sometimes it is easy to train for necessary skills with one or two programs. But it becomes challenging in segments where technology is changing rapidly,” he added.

Editorial | In search of jobs: On the challenge of employment generation

During the IT boom, it was easy to get hired after graduation. But the industry has matured and net job additions have been coming down, amid a slowdown in the industry lately. While the number of global capability centres had grown, their requirement for specific skills made skilling initiatives essential, Mr. Ram observed.

He said CII is working with Anna University to update their curriculum.

He said T.N. government’s Naan Mudhalvan scheme is a good initiative for entry level job creation, but said its scope could be expanded with involvement of more firms and internships could be part of the program.

Extremely high underemployment

As on March 31, a whopping 54,25,114 people had registered across the State’s District Employment and Career Guidance Centres through the employment portal (www.tnvelaivaaippu.gov.in). Of these, 25,00,134 registrants were men, while 29,24,395 were women and another 285 were transgenders, according to a Labour Welfare and Skill Development Department (LWSD) policy note for 2024-25. But K. Veera Raghava Rao, Secretary, LWSD Department said this number “may not necessarily reflect a shortage of job opportunities as a majority of these people are working elsewhere,” pointing to the extremely high level of underemployment in T.N..

Mr. Rao, added that through the Naan Mudhalvan initiative, the government is engaging colleges, industrial training institutes (ITIs), and polytechnics across the state to provide training and assist students in securing jobs.

The government has established industry 4.0 technology centres in ITIs state-wide for the students to keep pace with latest industry trends. And many MSMEs are using these centres, Mr. Rao said, adding the curriculum at polytechnics is being updated to align with industry needs. Additionally, industries are expanding their internship programs”, he said.

The state’s employment landscape is, however, expected to wiT.N.ess significant demand in sectors like electronics, automobile, and auto component, including electric vehicles and solar cell manufacturing, as investments in these industries rise. Tamil Nadu is expected to generate more than one lakh jobs in the next few years, especially in smaller cities and towns like Krishnagiri, Hosur, Coimbatore, reckoned P. Subburathinam, Chief Strategy Officer, TeamLease Services Limited, a staffing firm.

There are significant disparities in job opportunities between urban and rural areas. Rural areas often lack the infrastructure and investment needed to create jobs, leading to migration to urban centres and associated socio-economic issues, Mr. Subburathinam added.

Another concern has been the probable labour displacement due to rising automation, he warned.

K. E. Raghunathan, National Chairman, Association of Indian Entrepreneurs said unemployment is the key issue across India. Industry and educational institutions must align in addressing the skills gap concern. An option of adding another semester to undergo practical training like in the case of medical courses must be considered, Mr. Raghunathan said.