When Prime Minister Narendra Modi’s new government announces the national budget this week, Indians will be looking for clues on how he will tackle unemployment, a major grievance among voters who deprived him of a clear majority in last month’s election.
While the Indian economy is seen growing at a fast clip of 7.2% this year, job creation has lagged.
The latest consumer confidence polls by the Reserve Bank of India, taken in May, show that voters are increasingly concerned about unemployment and inflation.
India’s official unemployment rate stands at 3.2%, far below figures offered by independent researchers, like the Centre for Monitoring Indian Economy, which said the jobless rate was 9.2% in May.
Here are some facts about India’s labor market:
– Out of a population of 1.43 billion people, India has an estimated 582 million workers.
– Job growth in recent years has come primarily from self-employment, which accounted for 56% of work in 2022, or family enterprises.
– Almost 82% of the workforce is engaged in the informal sector, while only a fifth of the workforce has jobs that pay a salary or wages.
– Agriculture accounts for 47% of all jobs, an increase from 42% in 2019.
– Manufacturing employed 11.4% of workers, fewer than it did before the Covid-19 pandemic.
– Women’s workforce participation increased to 37% in 2023 from 25% in 2019, boosted by agricultural, own-account, and unpaid family work.
– However, a significant gender gap persists, with men’s participation at more than twice the rate at 77%.
– Youth make up the vast majority of the unemployed population at 83%.
– Educated young people suffer higher rates of unemployment: 18% of those who have completed secondary education or higher are unemployed, compared with 3.4% of those who cannot read or write.
