The National Statistical Office (NSO) recently released the Periodic Labour Force Survey (PLFS) report for 2023-24, highlighting a stagnant unemployment rate of 3.2%. This raises concerns about India's challenge in generating sufficient formal job opportunities despite the growing workforce. The report sheds light on the dynamics of employment and highlights areas for improvement in addressing India's unemployment issues.
Key Facts About the PLFS Report
Purpose: The PLFS aims to measure employment and unemployment dynamics at short intervals and across both urban and rural areas.
Methodology: Introduced changes in sampling and data collection, including the number of hours worked.
Objectives: To measure labour force participation in urban areas and provide labour estimates using various statuses.
Key Highlights of the PLFS Report 2023-24
Stagnant Unemployment Rate: Unemployment rate remains steady at 3.2%, the same as 2022-23, indicating a lack of improvement in job creation.
Increase in Labour Force Participation Rate (LFPR): LFPR rose to 60.1%, with rural areas at 63.7% and urban areas at 52%, reflecting growing job seekers in rural areas.
Worker Population Ratio (WPR): WPR increased to 58.2%, with significant gender disparities—76.3% for men and 40.3% for women.
Job Quality Improvement: A marginal increase in salaried workers to 21.7%, signaling slight improvement in formal job structures.
Urban-Rural Divergence: Rural unemployment rose to 2.5%, while urban unemployment improved to 5.1%.
Gender Disparity: Women's unemployment rate rose to 3.2%, higher than men's at 3.2%.
Growth in Self-Employment: Self-employment increased to 58.4%, indicating more people are relying on informal jobs.
Government Initiatives Related to Employment
SMILE: Supports marginalized groups with financial assistance for livelihood and enterprise development.
PM-DAKSH: Enhances skill development in marginalized communities to improve employability.
MGNREGA: Guarantees 100 days of wage employment annually for rural households.
Start-Up India: Promotes innovation by providing tax exemptions and funding support for startups.
Rozgar Mela: Distributes employment letters to candidates to boost job opportunities.
Reasons India Struggles to Generate Formal Jobs
Informalisation of Employment: Increased informal jobs, often unprotected by labour laws.
Technological Disruptions: Automation and AI threaten job opportunities even for skilled workers.
Policy Missteps: Policies like demonetization and GST hurt MSMEs, crucial for job creation.
Skill Mismatch: Decline in skilled jobs despite significant government focus on skill development.
Way Forward
Sectoral Diversification: Invest in manufacturing, renewable energy, and technology for productive job creation.
Strengthen MSMEs: Provide targeted support to help MSMEs expand and employ more people.
Human-Centric Technology Adaptation: Focus on sectors less likely to be fully automated, like renewable energy and healthcare.
Industry-Aligned Skill Development: Align skill development programs with current industry needs, such as AI, cybersecurity, and green jobs.
Promote New-Age Service Sectors: Encourage the growth of e-commerce, logistics, and online education to generate jobs.
Conclusion
The PLFS report highlights key areas for concern in India’s employment landscape, particularly the stagnation in formal job creation. The government's ongoing efforts, along with sectoral diversification, skill alignment, and support for MSMEs, are critical in tackling unemployment and generating sustainable jobs in the future. However, adapting to technological advancements and addressing informal employment remains crucial for long-term job creation.
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