India Employment Report 2024: Unemployment Raised in India

The India Employment Report 2024, a joint effort by the International Labour Organization (ILO) and the Institute for Human Development (IHD), sheds light on the nation's employment landscape and highlights several concerning trends.

The report reveals that the share of educated young individuals among the unemployed in India has risen from 54% in 2000 to 66% in 2022, indicating that the problem of unemployment has become increasingly concentrated among the youth, especially those residing in urban areas.

Additionally, the study found that while employment and underemployment of youngsters witnessed an increase from 2000 to 2019, these figures declined during the COVID-19 pandemic years.

Specifically, in 2000, half of the total employed youth population was self-employed, 13% had regular jobs, while the remaining 37% held casual jobs.

The corresponding figures for 2012, 2019, and 2022 were 46%, 21%, 33%; 42%, 32%, 26%; and 47%, 28%, 25%, respectively.

Future Projections and Policy Recommendations

According to projections, India is expected to add 7-8 million youths to its labor workforce during the next decade. To address the challenges highlighted in the report, the study recommends five key policy areas for further action:

• Promoting job creation

• Improving the quality of employment

• Addressing inequalities in the labor market

• Strengthening both skills and policies of the active labor market

• Bridging knowledge deficits on labor market patterns and youth employment

Government's Response and Criticism

Commenting on the report at its unveiling, the Chief Economic Adviser, V. Anantha Nageswaran, stated that the government cannot intervene in every social or economic problem.

He emphasized that in the "normal world," it is the commercial sector and those engaged in for-profit activity who need to do the hiring.

However, several opposition leaders, including Congress national president Mallikarjun Kharge, attacked the Narendra Modi government over the report's findings. They criticized the government's failure to address the employment crisis effectively.

Employment Conditions and Quality of Work

The report also highlights concerns about poor employment conditions in India, particularly regarding the slow transition to non-farm employment and the increasing number of women in self-employment and unpaid family work.

While the 'employment condition index' has improved between 2004-05 and 2021-22, some states have remained at the bottom, while others have remained at the top.

This index is based on seven labor market outcome indicators, including the percentage of workers employed in regular formal work, the percentage of casual laborers, the percentage of self-employed workers below the poverty line, work participation rate, average monthly earnings of casual laborers, unemployment rate of secondary and above-educated youth, and youth not in employment and education or training.

Informal Employment and Self-Employment

• Informal employment has risen in India, with around half of the jobs in the formal sector being informal.

• Self-employment remains the primary source of employment, accounting for 55.8% in 2022.

• Casual and regular employment accounted for 22.7% and 21.5%, respectively.

• The share of self-employment remained almost stable between 2000 and 2019, while regular employment increased by almost 10 percentage points, to 23.8% from 14.2%.

However, this trend reversed by 2022, with self-employment increasing to 55.8%, while the share of regular employment declined to 21.5%. Casual employment consistently declined to 22.7% in 2022 from 33.3% in 2000.

Youth Employment and Quality of Work

• While youth employment has seen a rise, the quality of work remains a concern, especially for qualified young workers.

• The share of unemployed youths in the total unemployed population was 82.9% in 2022, with educated youths among all unemployed people also increasing to 65.7% in 2022 from 54.2% in 2000.

The unemployment rate among educated youths was six times greater for those who had completed secondary education or higher (18.4%) and nine times higher for graduates (29.1%) than for persons who could not read or write (3.4%) in 2022.

Policy Recommendations Reiterated

To address the issues highlighted in the report, the study reiterates the five key policy areas for further action: promoting job creation, improving employment quality, addressing labor market inequalities, strengthening skills and active labor market policies, and bridging knowledge deficits on labor market patterns and youth employment.

By presenting a comprehensive analysis of the employment landscape in India, the India Employment Report 2024 serves as a valuable resource for policymakers, researchers, and stakeholders to understand the challenges and formulate effective strategies to tackle the issues of unemployment, underemployment, and the quality of work in the country.