The Labour Force Participation Rate was 39.6% for people of all ages. Representational file image.
| Photo Credit: Reuters

The unemployment rate in the urban areas of the country was 6.4% for the period of October to December 2024 for persons of age 15 years and above, according to the Periodic Labour Force Survey (PLFS) released by the Ministry of Statistics and Programme Implementation in New Delhi on Tuesday (February 18, 2025). For male, the the unemployment rate was 5.8% during the period, while for female it was 8.1%.

Last year, during the same quarter, unemployment rate for ages above 15 was 6.5%, while in the last quarter of July to September, 2024, the rate was 6.4%. The female unemployment rate last year was 8.6%.

Also read | The job crisis undermines state legitimacy 

Among the States, Himachal Pradesh had the highest unemployment rate with 10.4% and Gujarat had the lowest with 3.0%. Female unemployment rate too was the highest in Himachal Pradesh with 24% and lowest was in Delhi at 1.3%. PLFS defines unemployment rate as the percentage of unemployed persons in the labour force in current weekly status (CWS) – the number of persons either employed or unemployed on an average in a week.

The Labour Force Participation Rate (LFPR), the percentage of population in the labour force, was 39.6% for people of all ages. It was 39.2% in the similar quarter last year. The LFPR for women has increased by 0.1 percentage point to 20% than last year’s 19.9%. However, the LFPR decreased from last quarter’s figure of 20.3%. The lowest LFPR for all people and for women are the lowest in Bihar with 30.7% and 9.9% respectively. The PLFS was done among 1,70,487 people in 45,074 households.

The Worker Population Ratio (WPR) in urban areas among persons of age 15 years and above has increased from 46.6% during October to December, 2023, to 47.2% in October to December, 2024. WPR for male of age 15 years and above for urban areas increased from 69.8% in October to December, 2023, to 70.9% during October to December, 2024.

The workers are classified into three broad categories according to their status in employment such as self-employed, regular wage/salaried employee and casual labour. Within the category of self-employed, two sub-categories have been made as own account worker and employer combined together and unpaid helper in household enterprises. In these categories, 39.9% were self-employed, 49.4% were regular employees and 10.7% were casual labourers. 5.5% workers were in agriculture sector, 31.8% workers were in secondary sector, including mining, and 62.7% workers were in tertiary sector that includes service sectors.

The previous Budget, presented in July 2024 after the Lok Sabha election, had accorded priority to employment and skill development, given the nature of the election mandate. The Finance Minister had announced a Prime Minister’s Package of five schemes and initiatives to facilitate job and internship opportunities for 4.1 crore youth over a five-year period with a central outlay of ₹2 lakh crore. However, the Budget speech delivered in Parliament on February 1, 2025, did not refer to the Prime Minister’s Package even once. The document on implementation of Budget 2024-25 announcements states that a “draft Cabinet note on Employment Linked Incentive scheme is under finalisation” and “several meetings have been held with the Ministry of Labour and CII to discuss the relationship between capital expenditure and employment generation”. In other words, the future of the scheme looks bleak.

Deflationary budget

The September 2024 report of the Periodic Labour Force Survey (PLFS) revealed that in 2023-24, the youth unemployment rate (for those aged 15-29 years) had increased to 10.2% and the unemployment rate among graduates was 13%. Time series data from the PLFS show that the share of the workforce engaged in regular or salaried employment in the post-pandemic period has shrunk, while the share engaged in agriculture and informal self-employment has risen.

The latest Economic Survey also shows that average real earnings of self-employed male workers in India fell from ₹9,454 in 2017-18 to ₹8,591 in 2023-24. The monthly real wages of regular/salaried male workers also fell from an average of ₹12,665 in 2017-18 to ₹11,858 in 2023-24. Surplus labour inundating the job market, combined with high food inflation, have severely squeezed the real incomes and livelihoods of an overwhelming majority of India’s workforce. For a Finance Minister to overlook this is disingenuous.

The advanced estimates of GDP have already projected a decline of the real GDP growth rate to 6.4% in 2024-25 from 8.2% last year. In keeping with this, there is a slowdown in the Centre’s net tax revenues in 2024-25. With the Finance Minister keen on adhering to the fiscal consolidation path, the axe has fallen on government expenditure. Total expenditure is now likely to be over ₹1 lakh crore short of Budget Estimates (BE), with capital expenditure falling short of the target by over ₹92,000 crore.

Public expenditure on rural and urban development, agriculture, education, food subsidy, energy, transport, and health are all being axed. Among centrally sponsored schemes, the Revised Estimates (RE) for the Jal Jeevan Mission and Pradhan Mantri Awas Yojana (both rural and urban) show declines of ₹47,469 crore and ₹38,575 crore, respectively, from their BE. The expenditure on MGNREGA was cut in the BE itself by ₹3,654 crore from the previous year. Such deep cuts in budgeted capital and welfare expenditures would have a dampening effect on investment and consumption, especially in rural areas.

The Finance Minister has sought to counterbalance the deflationary impact of these expenditure cuts by enhancing the annual rebate for income tax payers from ₹7 lakh to ₹12 lakh from 2025-26. Data from the Income Tax Department show that only around 2.8 crore individuals had paid positive taxes in the assessment year 2023-24, out of the 7.54 crore filing income tax returns. The income tax relief for next year would therefore go to 2.8 crore individuals, who form only around 22% of India’s salaried workforce. For the rest who are faced with dwindling real incomes, there is nothing on offer.

The Finance Minister has estimated the revenue foregone on account of the income tax rebate to be ₹1 lakh crore. Instead, a cut of a similar magnitude in indirect taxes, such as the exorbitant excise duties on fuel or the central GST rates on mass consumption goods, could have provided relief to the entire class of working people. It is well known that the consumption propensity of wage earners is higher than that of the profit earners.

The average daily wage rate actually received by a MGNREGA worker (as per data provided by Ministry of Rural Development dashboard) has increased from ₹200.71 in 2019-20 to ₹252.31 in 2024-25. The national floor level minimum wage for unskilled workers in agriculture, in contrast, has been set at ₹452 in 2024-25. A well deserved, substantial hike in the MGNREGA wages in the Union Budget alongside an increase in rural development outlays would have led to increased consumption demand in the rural areas. The consumption effect of income tax breaks, in contrast, would be far more limited and concentrated in urban areas.

Running out of ideas

The latest Economic Survey cites a private sector research report to show how the after tax profit-to-GDP ratio of Nifty 500 companies surged from 2.1% in 2020-21 to 4.8% in 2023-24. While the deep corporate tax cut of September 2019 played a vital role in this profit surge, it has neither translated into higher levels of private corporate investment, nor employment generation.

Yet, the Union Budget has relied upon another tax break, this time for income tax payers, to inject demand into the economy, even while cutting capital and welfare expenditures to compress the fiscal deficit. This is unlikely to generate higher levels of economic growth and employment and raise the living standards of the vast majority of the working people. It is evident that the government has run out of ideas on the economic front.

Prasenjit Bose is an economist and activist

Shivam Rangire, 24, is among the almost 20,000 candidates who turned up on July 16 at Air India Airport Services Ltd.’s (AIASL’s) gate at Andheri in Mumbai for a walk-in interview being held to fill 2,216 vacancies for the post of handymen.

The overcrowding could have led to a stampede. On receiving an email earlier in July, he was excited and hopeful of securing this job. He travelled from his hometown Akot, near Akola, about 600 km from Mumbai, in a bus only to be shocked on reaching the venue as he found the number of job aspirants overwhelmingly outnumbered the positions offered by AIASL. Following instructions, he returned home and again journeyed to Akola for a test to be held on July 30 by AIASL.

“We could have handled the crowd better” said Rambabu Chintalacheruvu, Chief Executive Officer , AIASL. “Normally, when interviews for handymen happen, a large turnout happens,” Mr. Chintalachheruvu added. He said the local police were informed regarding the crowd in addition to providing facilities such as tents and water for the candidates.

A handyman or loader is responsible for shifting luggage from passenger and cargo aircraft at the airport. A candidate is expected to have graduated class 10, according to a recruitment notice on AIASL’s website. A Bachelor of Arts (BA) graduate, Mr. Rangire had to wait for two years before applying for a job he was grossly overqualified for. The recruitment process involved a physical fitness test, which is measured by the number of up to 20 kg each gunny bags one can toss within 30 seconds. Those clearing seven bags in 30 seconds qualify for the next round, said another job seeker, who like Mr. Rangire is part of Maharashtra’s labour force.

The Periodic Labour Force Survey (PLFS) of India 2023-24 data has a slightly dull picture of Maharashtra compared with the national average. While both labour force and workforce participation rates have increased by about 2 percentage points for India, the same metrics have seen a marginal dip compared with 2022-23 for the State. Labour force participation rate is the share of the workforce that is employed or currently looking for employment. The PLFS 2023-24 estimates the State’s urban unemployment to be at 5.2%, against 4.6% in the previous year. With respect to overall unemployment rate, Maharashtra clocked 3.3% in 2023-24, more or less the same as the national unemployment rate of 3.2% for the same period.

Economists believe the data does not reflect the complete picture of the employment situation in India. “Millions (of) so-called employed in PLFS are unemployed as per CMIE (Centre for Monitoring Indian Economy) and ILO (International Labour Organisation),” Santosh Mehrotra, Visiting Professor, Centre for Development Studies, University of Bath, told The Hindu. For instance, unpaid family labour is considered as employment in PLFS but not so by the CMIE or the ILO, Mr. Mehrotra added. Moreover, national trends suggest an rise in agricultural sector employment and decrease in manufacturing employment, which will not show up as a dip in employment numbers, he said.

This becomes clearer when looking at data from India Unemployment Report 2023 from the ILO. The global labour body suggests educated unemployment in Maharashtra was 15% in 2022, an increase from 11% a decade ago. PLFS, however, shows the level of unemployment of those educated above secondary level to be at 5.9% in 2023-24 from 6.1% in the previous year. To be sure, PLFS report gives data for all working age groups, while ILO report shows data only for labour in the age group of 15-29.

‘Failure of employment generation’

Apart from direct unemployment, there is also the problem of being unemployable or employed below one’s qualification. Mr. Rangire’s story is a case in point. The government in Union Budget 2024-25 mentioned skilling youngsters and providing internships in top companies. Education experts believe this is more a problem of the education system and is an act of shifting the blame on to students. “The failure is not of the student. They studied what they were told to study,” Maheshwar Peri, Chairman of Careers 360, a career counselling portal, told The Hindu. “Our failure of not creating enough employment opportunities is being transferred to the employability of the students”, said Mr. Peri. There is a gap between what the students are trained for, what they are promised and the real employment-generation capacity of the system, he added. “There is a crisis in the employment-education fit,” Mr. Mehrotra added.

While Mr. Rangire was able to find a vacancy in a government-controlled entity in hope of a job, others struggled. If he remains unemployed, for now, he qualifies to get ₹10,000 monthly under the recently announced Ladka Bhau (Adorable Brother) Scheme by the Maharashtra government. This initiative aims at providing young men with a monthly stipend based on educational qualifications, in the range of ₹6,000 to ₹10,000, and practical work experience.

Irrespective of the educational qualification, Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGA) provides up to 100 days of labour opportunities annually. Maharashtra’s Economic Survey 2023-24 showed that households provided with jobs increased to 24.5 lakh in 2023-24 from 20.4 lakh in 2021-22. On an average, a household was employed for 47 days in 2023-24 up from 41 days in 2021-22. The increase in MGNREGA employment is a reflection of increasing rural distress.

Proliferation of informal jobs

“There are many who are over-qualified, some with Master of Business Administration degrees and even with PhDs, but you will find them driving autorickshaw or cabs, selling tea or snacks in cities,” said Vivek Monteiro, Secretary Centre of Indian Trade Unions (CITU) Maharashtra State Committee. Some people who have vocational skills take up work as carpenters or painters. The rest have to depend on ‘naka’ and ‘bandkham’ work [casual labourers and construction workers]. “The cab and auto drivers are large areas of self-employment which are indications of under-employment,” Mr. Monteiro added.

Agricultural distress is also a reason behind people moving to casual labour. “Farmers’ children are unable to sustain the agribusiness due to failed government schemes and insurance covers. They move to Mumbai to look for odd jobs,” said Sachin Atmaram Holkar, an agriculturist based in Nashik. Export curbs on onions, intended to arrest inflation, pushed farmers to a livelihood crisis in rural Maharashtra. These farmers migrate to Mumbai for daily wage labour, which are jobs that have no security, Mr. Holkar added.

Some like Amol Ashok Gorde from Nashik, stayed jobless for eight years. Mr. Gorde appeared for 50 public exams, spending about ₹2,500 on each of them and doing odd jobs, all despite being an engineering graduate before settling down in a job at a private firm as an assistant engineer. Mr. Rangire and Mr. Gorde, from Maharashtra’s interiors, are among countless people with similar story across the State.

Government action

After a Cabinet meeting on July 30, Maharashtra’s Chief Minister Eknath Shinde announced projects worth ₹81,000 crore, which, he said, would employ 20,000 people. The projects would be focussed on sectors like semiconductors, green energy and lithium batteries. The projects are expected to come up in Vidarbha and Marathwada regions, but the timeline on employment generation is unclear.

Until then, the educated and skilled youth look forward to Deputy Chief Minister Devendra Fadnavis’ assurance that the government would fill up one lakh vacant government jobs.

Significantly, the announcement was made months ahead of the Assembly elections, perhaps an indication of the importance employment is likely to be during the State elections.

Photo used for representation purpose only.
| Photo Credit: Getty Image/iStockphoto

The Periodic Labour Force Survey (PLFS) for the period between July 2023 and June 2024, released by the Labour Bureau on Monday (September 23, 2024), reported no major change in the unemployment rate, and there is minor increase in the distribution of workers in agriculture and the manufacturing sector shows no growth in giving jobs compared to past years. The participation of women workforce has also improved. The Centre had faced criticism for growing unemployment rate and decrease in the number of women in jobs.

A release by the Union Ministry of Statistics and Programme Implementation said that in rural areas, the Labour Force Participation Rate (LFPR) increased from 50.7% in 2017-18 to 63.7% in 2023-24 while for urban areas it increased from 47.6% to 52.0%. “LFPR for male in India increased from 75.8% in 2017-18 to 78.8% in 2023-24 and corresponding increase in LFPR for female was from 23.3% to 41.7%,” the release said. The LFPR for Muslim women increased from 15% in 2021-22 to 21.4% in 2023-24. In the case of Hindu women, the participation in workforce increased from 26.1% in 2021-22 to 33.3% in this year. Similarly, among Sikh and Christian women, the LFPR increased from 19.8% to 26.7% and 34.2% to 38.3% respectively for the same period.

In rural areas, the unemployment rate (UR) decreased from 5.3% in 2017-18 to 2.5% in 2023-24 while for urban areas it decreased from 7.7% to 5.1%. “UR for male in India decreased from 6.1% in 2017-18 to 3.2% in 2023-24 and corresponding decrease for female was from 5.6% to 3.2%,” the Centre said. The overall unemployment rate is 3.2%, similar to last year.

Grim picture

Experts said the annual survey gave a grim picture of the employment scenario. “Grim situation has become grimmer. The annual report is revealing it,” said labour economist Santosh Mehrotra. “There is no improvement in the unemployment scenario, neither in youth unemployment nor in overall unemployment,” said Prof. Mehrotra. He said the Centre continues to claim that the LFPR and Worker Population Ratio were increasing. “It is because of the increase in workers in agriculture. This also means that unpaid family labour has also increased and the PLFS counts this unpaid family labour as employment. The participation of workers in agriculture share has gone up for the fourth year in a row. This is shocking,” he said.

Prof. Mehrotra said the increase in workforce in agriculture meant that the process of people looking for non-farm jobs reversed and it had not stopped. “The number of people who have gone back to agriculture in search of jobs may have increased from 20 crore in 2012 to nearly 27 crore in 2024,” he said.

As the workers’ participation in manufacturing is still 11.4%, Prof. Mehrotra said, the share of manufacturing in providing employment is not increasing. “In 2012, it was 12.8%, and it ever recovered in the last 10 years. “The contribution of construction work has gone back to 12%. The sector, which revived, is not showing any buoyancy,” he said.

The high unemployment rate in the Bharatiya Janta Party-ruled Haryana reflected even in Union government surveys, has been a major weapon in the hands of the Opposition to attack the State government, and more so as the State goes to the polls in a few weeks from now.

But the Periodic Labour Force Survey (PLFS) by the Ministry of Statistics and Programme Implementation for the January-March quarter in FY24, shows that the unemployment rate among those above 15 years of age as per current weekly status in urban areas has more than halved to 4.1% from 8.8% since the corresponding quarter the year before, dropping below the national average of 6.7%.

Sharp contrast

This is in sharp contrast to the annual PLFS results for 2021-22 which showed that Haryana with an unemployment rate of 9% – more than double the national rate of 4.1%, had fared poorly compared to its neighbours including Uttar Pradesh (2.9%), Himachal Pradesh (4.0%), Rajasthan (4.7%) and Punjab (6.4%).

Attributing the high unemployment rate in FY22 in the State to the global post-Covid economic slowdown in sectors such as hospitality and civil aviation, Chief Principal Secretary to the Chief Minister, Rajesh Khullar told The Hindu that job creation, both in the public and private sector, had been the Government’s top priority. He said the government was on a “job offering spree” in the past few months to fill government posts.

“Around 30,000 regular government jobs, including in Group C and D, have been filled this year so far with Chief Minister Nayab Singh Saini handing over appointment letters to 7,500 Trained Graduate Teachers on July 30. The government aims to give 50,000 regular jobs before the Assembly polls on October 5, but some of these appointments have been delayed as the Model Code of Conduct came into force on August 16.

‘Mission 60,000’

His predecessor Manohar Lal had in January announced “Mission 60,000” for youth employment for Below Poverty Line (BPL) families by engaging them as “Van Mitras”, “E-Sewa Mitras” and “Kisan Mitras” and imparting training to 10,000 youth to become contractors,” said Mr. Khullar.

Read: After furore over CMIE data, govt. figures show Haryana sliding on unemployment

The proposed manufacturing plants of Maruti Suzuki and Suzuki Motorcycle at Industrial Model Township at Kharkhoda in Sonipat district to be commissioned next year are likely to generate around 15,000 direct jobs, he said, adding these efforts by the government are getting reflected in the recent job survey reports.

Dismissing official job statistics as mere “jugglery of data”, Naveen Jaihind, president of Jai Hind Sena, a social organisation said not enough government jobs have been filled in the past few years. Protesting in a unique way against unemployment in the agrarian State, Mr. Jaihind, led a “Berozgaro Ki Baraat (Wedding Procession of Unemployed)” in Rohtak in January last year, to highlight the socio-economic implications of high unemployment among the youth.

Mr. Jaihind, who is also former Haryana AAP president, said the State’s skewed sex ratio, coupled with high unemployment rate had led to rising number of young men forced to remain single in rural Haryana pushing them into drug-addiction and crime. A resident of Rohtak’s Meham, Shankar Dayal Sharma, a Masters in Physiotherapy, said though every hospital and health care centre needs a physiotherapist, the government had advertised only eight vacancies a decade ago. Working part-time at a nearby clinic for a paltry ₹9,000 per month, Mr. Sharma, 30, said he was tired of waiting for a physiotherapist’s job and was ready work a Group-D job with the Government if opportunity arose. “A couple of relatives are teaching at private schools. They hold PhD degrees. Yet they are willing to work Group-D jobs because the government has failed to offer them jobs as per their qualifications,” Mr. Sharma said.

Two-time Congress Chief Minister and Opposition Leader, Bhupinder Singh Hooda, critical of the Government’s efforts in jobs creation said it is instead sending workers to warn-torn Israel. Mr. Khattar’s government facilitated 10,000 people to be recruited in Israel’s construction sector amid a labour shortage there. He said the Government has not filled more than two lakh posts across departments, and is instead recruiting non-Haryanvi residents to higher positions. 

‘Going abroad’

A Jind-based travel agent, seeking anonymity, spoke of a growing trend among youth from Haryana’s districts bordering Punjab emigrating legally or illegally for some years now, looking for better opportunities. “Government jobs still remain the top preference for the youth as they look for stability. But there have not been enough appointments in the past few years, more so under the present Government. The youth have begun going abroad. They are inspired by their friends who have gone abroad and who present a rosy picture of their lives on social media,” said the agent.

Also read:Eight crore new jobs in last three to four years: PM Modi

Former general-secretary, Manesar Industries Welfare Association, Manmohan Gaind, said there is huge demand for a skilled workforce. But the government’s programmes to impart skills had failed to produce the workforce with the desired skills. He said the government must incentivise industry to impart skills to the youth by bearing the entire expenses for their training. He also demanded that Micro, Small and Medium Enterprises (MSMEs) be treated on par with the agriculture sector and be offered credit at 4-5% interest rate. “While the government may have to waive credit to farmers, MSMEs repay every single penny to the banks and also generate jobs. Though home loan is available at 8% interest rate, MSMEs borrow at 10-11% rate to buy a machine for their expansion,” complained Mr. Gaind, Chief Executive Officer, M. M. Creations, which makes couture clothing and home furnishings.

A poster of an immigration consulting agency in Rajpura town amid rising emigration in Punjab.
| Photo Credit: REUTERS

Uncertain over securing a suitable job, Ranjandeep Singh, a 22-year-old bachelor of arts graduate in Punjab’s Malout town in Muktsar district has been for the past six months rigorously preparing to clear his language testing exams as he aspires and foresees ‘a better life’ abroad. His concern — similar to many youngsters in Punjab — is the want of suitable employment opportunities, and in the prevailing scenario migrating abroad is Mr. Singh’s topmost preference.

“I am preparing for IELTS (English language proficiency test) exam and shall appear next month. Once I clear it, I intend to go to Canada to study and find a job. I have lost hope of finding a suitable job here. By suitable, I mean a job in which I can live a dignified life. I completed my BA last year (2023). Later, I got a job as a security guard at a local private company in Malout. I was getting a meagre salary for the work, making it difficult for me to assist my family. Also, the long working hours took a toll on my health, after working for two months I left the job. I also worked in the sales wing of a local pesticide company, but with the scanty wages, making ends meet was tough. Finally, I decided to go abroad. I am preparing to go to Canada,” said Mr. Singh, who belongs to a family that owns a 4-5 acre farm land at village Karamgarh.

‘Protest march’

Close to 150 kilometres away from Malout, on July 28, in Sangrur — the hometown of Chief Minister Bhagwant Mann —  under the banner of ‘Punjab Berozgar Sanjha Morcha’ (Punjab Unemployed Joint Front), five outfits of youths, who have been for long seeking government jobs, were up in arms against the Aam Aadmi Party (AAP) government in the State for its alleged apathy towards their demands. They staged a ‘protest march’ near the Chief Minister’s local residence in Sangrur, even as the protesters were stopped by the Police as they attempted to cross the barricades. Shouting anti-government slogans, the protesters blamed the AAP government for not paying any heed to the plight of “unemployed youth”.

41-year-old Raman Kumar, B.Ed (Bachelor of Education), who cleared his Punjab State Teacher Eligibility Test in 2018 is annoyed as his wait for a “secure government job” is still a distant dream. 

Sukhwinder Singh Dhilwan, who has been leading the struggle of these youngsters asserts that even though there are several posts vacant in departments such as health and education, the State government was not recruiting. “We are asking the government to fill up vacant posts of the master cadre of teachers in all subjects and grant age relaxation. Also, the vacant posts of multi-purpose health workers should be advertised and filled. The examination for art and craft teacher recruitment should be conducted among other demands,” he said.

According to the Periodic Labour Force Survey (January-March 2024) the unemployment rate in Punjab for the age group of 15 years and above (urban areas) stands at 6.8% among men and 10.9% among women. Punjab’s total unemployment rate is 7.7%, which is above the national unemployment rate of 6.7%.

Also read:On unemployment in Indian States

The matter of concern among a few economists, however, is the unemployment rate among the youth. As per the survey, the unemployment rate in Punjab in the age group of 15 and 29 years in urban areas is 17.4%, which includes 15% among men and 26% among women.

Pointing out that the quality of employment is quite bad in Punjab, noted economist Dr. Lakhwinder Singh, a visiting professor at the Institute for Human Development, New Delhi, says “80% of youth employed in Punjab is highly dissatisfied withtheir jobs. This is highest across Indian States. The generation of new but decent jobs will prevent them from going to greener pastures.”

“Given the structure and slow growth of the Punjab economy, the employment elasticity is low. Thus high unemployment is the natural outcome. To reduce unemployment, the Punjab government should invest to raise capital formation that will make the Punjab economy dynamic and generate higher GSDP growth and employment. Punjab is suffering from investment famine. Consequently, the digital revolution and the forth industrial revolution in technologies are bypassing Punjab. The State government should rise from this slumber and make investments in these areas that will attract young educated professionals to seek employment in these sectors. Private corporate investment can also be induced to invest in new activities where most of the youth aspire to work,” says Dr. Lakhwinder.

Rise in migration

The latest study by Ludhiana-based Punjab Agricultural University (PAU) has revealed that Punjab is witnessing a steady rise in migration. Punjab has witnessed a rise in emigration with approximately 13.34% of rural households having at least one member who has emigrated.

“Low income (72.81%), less employment opportunities (72.97%), and corruption (72.97%) were the main factors reported behind overseas migration as stated by migrants’ family,” points out the study. Meanwhile, the State government claims to have been working to improve the employment rate. 

Casual women workers — across both rural and urban sectors — saw a net increase in their average real monthly earnings
| Photo Credit: JOTHI RAMALINGAM. B

Recent data from the Periodic Labour Force Survey (PLFS) of 2022-23 revealed a strengthening of the labour market, with unemployment rates falling and labour force participation rates (LFPRs) rising. Rural women’s LFPRs — for those aged 15 and above — rose from 19.7% in 2018-19 to 41.5% in 2022-23, a significant jump for a cohort that had long been on the margins of the labour market. These results were taken as examples of a robust post-pandemic recovery for the Indian economy.

Yet there are notes of caution. Much of the new employment generated for women has been in self-employment. There has been a rise in the proportion of women working as unpaid family helpers, with the share of rural working women in this form of employment rising from 37.9% to 43% between 2018-19 and 2022-23. The share of women in regular wage work fell from 22% to 16%. Greater employment seemed to be coming at the cost of suitable working conditions, especially for women.

While concerns regarding the forms of work have been extensively discussed, the aspect of earnings must also be examined to better understand the condition of the Indian labour market. While wages and earnings have increased, inflation has been high as well. If inflation is higher than earnings growth, real earnings reduce, reducing purchasing power.

The status of earnings

Here we will examine the real earnings of the workforce between the quarters of April-June 2019 and April-June 2023, covering the period before the onset of the pandemic and the latest period for when data is available. The PLFS collects information on the earnings of regular wage workers, casual workers and the self-employed (regular wage workers have fixed work hours and are paid on a regular basis; casual workers are employed on a daily basis on the availability of work and receive daily wages). We look at the monthly wage earnings of regular wage workers, and the gross earnings of the previous month for the self-employed. For casual workers, average daily wages are converted to monthly figures. The average of the Consumer Price Index (CPI) across the months of April to June of 2019 and 2023 are taken to convert nominal figures into real terms. The earnings for urban and rural workers were deflated by the urban and rural CPI for those periods separately.

Between 2019 and 2023, only casual workers — both men and women, across both rural and urban sectors — saw a net increase in their average real monthly earnings. Women casual workers experienced a 13% increase across the entire period, while male casual workers enjoyed a 10.33% increase. The only other cohorts which saw an increase in real earnings in 2023 as compared to 2019 were women in regular wage work — a 4.27% increase — and male self-employed workers (6.9%). Significant inflation over this period ate away at the gains of workers, resulting in lesser real earnings for most workers in 2023 as compared to the pre-pandemic period.

There are significant differences between urban and rural sectors. Urban male self-employed workers saw a reduction in real earnings, while rural male self-employed workers saw real earnings increase by roughly 14.67% in 2023 compared to 2019. However, the figure for gross earnings of the self-employed do not include those who reported zero incomes, and hence these aggregate figures may not give a true picture of earnings for the entire population of the self-employed.

In the case of regular wage workers, urban women saw a reduction in earnings, with real incomes in 2023, 2.34% lesser than that in 2019. Rural women in regular wage employment earned the highest gains of all cohorts, their monthly real earnings 27.5% higher in the quarter of April-June 2023 as compared to April-June 2019. Yet this cohort makes up only 8% of the rural female workforce, and hence a smaller proportion of the aggregate workforce.

The impact of inflation

On the other hand, the biggest declines were seen in the one cohort that showed a significant rise in employment: rural women in self-employment. The share of the rural female workforce in paid forms of self-employment rose from 22% to 28% between 2018-19 and 2022-23, yet their average monthly real gross earnings reduced by 7.72%, the largest reduction for any cohort. Large numbers of rural women have entered low-paying, low-productive jobs, perhaps to supplement household incomes in the wake of the pandemic — this does not indicate robustness of recovery. Note that this excludes women engaged as helpers in household enterprises, who, by definition, do not earn any income, and who form the largest proportion of rural working women.

The moderation of inflation by 2023 saw a gradual rise in real incomes. Between 2022 to 2023, all cohorts — except, surprisingly, urban women casual workers — saw a rise in real earnings. Self-employed men enjoyed significant gains, with rural and urban men’s earnings rising by 9.27% and 8.9% respectively. Rural self-employed women saw real earnings gains of 2.14%, while their urban counterparts experienced a gain of 4.2%. Wage workers — both casual and regular — did not see extensive gains, with only rural women in regular wage employment experiencing a 35.5% growth in real earnings. Urban men and women in regular wage employment experienced gains of 1.42% and 2.66% respectively.

Conclusion

While it is too soon to tell whether these gains indicate the beginning of a sustained recovery, the fact that every cohort — barring rural casual women workers — saw an increase in real earnings marks a distinct break from earlier periods. However, there is another problem. Real GDP growth between 2022 to 2023 was measured at around 7.2%. Only three cohorts experienced earnings growth faster than this: urban and rural male self-employed, and rural women in regular wage employment (the latter forming a miniscule portion of the aggregate workforce). Wage workers as a whole have seen real earnings grow slower than output, indicating a reduction in the share of wages even though growth remains healthy. This serves as further evidence of the possibility of India experiencing a K-shaped recovery in the wake of the pandemic.

Rahul Menon is Associate Professor, Jindal School of Government and Public Policy, O.P. Jindal Global University