The Naukri Question: Despite Headline Good News on Jobs, there are Worrying Trends - more Farm Workers & Women in Self-employment

GoI recently issued its annual Periodic Labour Force Survey (PLFS) 2021-22, the most comprehensive government dataset on employment. Juxtapose the 2021-22 dataset with PLFS 2018-19, the last pre-pandemic annual report, and one important change emerges. The number of Indians in the labour force increased from 37.5% of the population to 41.3% in 2021-22 on the back of a big jump in women entering the job market. However, parse the data and the trends that emerge are not so happy.

Two features stand out. One, the employment structure is regressing as more people are shifting back to agriculture where productivity and wages are lower. Two, the rise in women’s participation in the labour force is coming through self-employment and not jobs in factories or the service sector. Let’s start with the employment structure as it represents the big picture of the economy. In 2018-19, agriculture’s share of jobs was 42.5%. By 2021-22, it had increased to 45.5%. This is alarming for two reasons. Moving a greater proportion of the workforce out of agriculture to industry and services is essential for India’s economic transformation. This process picked up pace in the early part of the 21st century. If the reversal persists, realising India’s demographic dividend will be tough.

The shift towards agriculture has come at the cost of the already low level of employment in manufacturing. In 2018-19, 12.1% of jobs were in manufacturing. By 2021-22, it had dipped to 11.6%. Within this overall structure of employment, the nature of additional jobs being created points to a serious challenge. For India’s workforce, most additional jobs are coming in the self-employed category. This is pronounced for women. Consequently, the percentage of jobs in both the salaried and casual labour categories has declined. It’s not just that the openings that women have is tilted towards the self-employed category. A big chunk is as a helper in household enterprises, which PLFS reports point out excludes regular wages for work. It means many of the new jobs don’t translate into steady purchasing power. This is among India’s most serious economic challenges.