India job market outlook 2024

India’s Job Market in 2024: Insights from RBI, Citigroup, and PLFS

India’s Employment Growth: Analysis and Insights

RBI Data on Employment Growth

According to the Reserve Bank of India’s (RBI) recent data, the employment growth in India saw a significant increase in the fiscal year 2023-24. The employment growth rate jumped to nearly 6%, compared to a 3.2% increase in FY2023. This translated to an increase of approximately 4.67 crore in the workforce, raising the total to 64.33 crore in FY2024, up from 59.67 crore in FY2023. This data, part of the RBI’s Measuring Productivity at the Industry Level-The India KLEMS database, released on July 9, 2024, measures productivity across various industries in India.

Contrasting Views: Citigroup Report

A research report by Citigroup India, released just days before the RBI data, argued that India might struggle to create sufficient employment opportunities despite a 7% growth rate. The report highlighted concerns regarding the quality of jobs and underemployment. It pointed out that agriculture, which accounts for around 46% of all employment, contributes less than 20% to the GDP. In contrast, both manufacturing and services sectors employ a smaller share of the labor force relative to their GDP contribution.

Ministry of Labour and Employment’s Rebuttal

The Ministry of Labour and Employment refuted the Citigroup report, emphasizing the comprehensive and positive employment data from official sources like the Periodic Labour Force Survey (PLFS) and RBI’s KLEMS data. The Ministry stated that more than 8 crore employment opportunities were created between 2017-18 to 2021-22, averaging over 2 crore jobs per year. Furthermore, over 6.2 crore net subscribers joined the Employees’ Provident Fund Organisation (EPFO) between September 2017 and March 2024.

Latest Insights from PLFS

The quarterly bulletin of the Periodic Labour Force Survey (PLFS) released by the Ministry of Statistics and Programme Implementation (MoSPI) in May 2024, showed a slight decrease in the urban unemployment rate from 6.8% in January-March 2023 to 6.7% in January-March 2024 for those aged 15 and above. The female unemployment rate also declined from 9.2% to 8.5% during the same period. Additionally, the Labour Force Participation Rate (LFPR) in urban areas increased from 48.5% to 50.2%, and the Worker Population Ratio (WPR) for those aged 15 and above rose from 45.2% to 46.9%. The female WPR in urban areas saw an increase from 20.6% to 23.4%, reflecting an overall positive trend in employment.

Conclusion

While Citigroup’s report presents a cautious view on India’s employment scenario, the official data from RBI and the Ministry of Labour and Employment paint a more optimistic picture. The comprehensive data suggests significant employment growth, despite concerns about the quality and distribution of jobs across different sectors.