India’s Labour Market: A Post-Pandemic Recovery
India’s labour market has shown remarkable resilience and growth in recent years, particularly in the wake of the COVID-19 pandemic. The latest Economic Survey for 2024-25, presented by Union Minister of Finance and Corporate Affairs, Smt. Nirmala Sitharaman, highlights significant improvements in various labour market indicators. The survey indicates a substantial drop in the unemployment rate, increased participation in the workforce, and a notable rise in formal employment. These developments are crucial for realizing the vision of a “Viksit Bharat,” or developed India.
Declining Unemployment and Rising Participation
The Periodic Labour Force Survey (PLFS) reveals a significant decline in the unemployment rate in India. For individuals aged 15 years and older, the unemployment rate has decreased from 6% in 2017-18 to just 3.2% in 2023-24. This decline is a positive indicator of the recovery and growth of the Indian economy. Alongside this, the labour force participation rate and the worker population ratio have also seen considerable improvements.
Moreover, the formalization of the job market is evident from the doubling of net additions to Employees’ Provident Fund Organisation (EPFO) subscriptions, which rose from 61 lakh in FY19 to 131 lakh in FY24. This trend indicates that more individuals are entering the organized sector, which is essential for job security and benefits. Notably, 61% of net payroll additions are attributed to individuals under the age of 29, highlighting the youth’s increasing involvement in the organized workforce.
Additionally, the proportion of self-employed workers has risen from 52.2% in 2017-18 to 58.4% in 2023-24. This shift reflects a growing entrepreneurial spirit and a preference for flexible work arrangements. The decline in casual workers, from 24.9% to 19.8%, further indicates a transition towards more structured forms of self-employment. The Annual Survey of Industries (ASI) also reported a 7% increase in employment in FY23 compared to the previous year, translating to over 22 lakh new jobs since the pre-pandemic period.
Empowering Women in the Workforce
The Economic Survey emphasizes the importance of women’s participation in the workforce. The Female Labour Force Participation Rate (FLFPR) has increased significantly, rising from 23.3% in 2017-18 to 41.7% in 2023-24. This growth reflects the enhanced involvement of women in economic activities across various sectors, both in rural and urban areas.
To further promote women’s entrepreneurship, the government has launched several initiatives aimed at providing easier access to credit, marketing support, and skill development. Programs such as the PM Employment Guarantee Programme, SANKALP, and the Adivasi Mahila Sashaktikaran Yojana are designed to empower women entrepreneurs by offering financial support, training, and mentorship. These initiatives are crucial for fostering a more inclusive economy and tapping into the latent potential of women to contribute to economic growth.
The growing participation of women in entrepreneurship not only enhances their financial independence but also propels the country towards higher levels of development. By supporting women-led enterprises, the government aims to create a more balanced and equitable workforce, which is essential for sustainable economic growth.
Addressing Income Inequality and Worker Welfare
While the Economic Survey highlights the impressive growth in corporate profitability, it also raises concerns about income inequality. Corporate profits have reached a 15-year peak in FY24, but wages have not kept pace. This disparity is particularly pronounced among large firms, leading to concerns about the sustainability of economic growth.
To ensure long-term stability, the survey emphasizes the need for a fair distribution of income between capital and labour. Sustained economic growth relies on bolstering employment incomes, which in turn fuels consumer spending and investment in production capacity. The survey advocates for policies that promote a more equitable distribution of wealth, which is essential for maintaining demand and supporting corporate revenue growth.
Additionally, the government has launched the eShram portal to support unorganised workers by providing them with a Universal Account Number (UAN) and creating a comprehensive National Database of Unorganised Workers (NDUW). As of December 2024, over 30.51 crore unorganised workers have registered on the eShram portal, which serves as a one-stop solution for accessing various social security schemes. This initiative aims to improve the welfare of unorganised workers, who often lack access to essential benefits and protections.
The Future of Employment: Skill Development and Emerging Sectors
The Economic Survey underscores the importance of skill development in preparing the workforce for future challenges. The government is committed to establishing a resilient and responsive skilled ecosystem that aligns with emerging global trends such as automation, digitalization, and climate change.
According to PLFS data, there is a strong correlation between educational attainment, occupational roles, and income levels. The government’s initiatives, such as the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) and the Craftsmen Training Scheme, have trained millions of individuals, significantly improving the proportion of skilled workers across various socio-economic classifications.
The survey also highlights the potential of the digital economy and renewable energy sectors in creating new job opportunities. These sectors not only offer immense potential for employment but also provide avenues for women’s financial independence and empowerment. By focusing on skill development and fostering entrepreneurship, India can enhance its workforce’s employability and competitiveness in the global job market.
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