Slower Pace of Job Creation

Context:

Recently, the Ministry of Statistics and Programme Implementation released the results for the Annual Survey of Industries (ASI) for 2020-21 and 2021-22.

Relevance:

GS Paper 2: Issues relating to development and management of Social Sector/Services relating to Health, Education, Human Resources.

Dimensions of the Article:

1. Key Terms related to Employment
2. Analysis of the Annual Survey of Industries (ASI) for 2020-21 and 2021-22
3. Estimate of employment
4. Steps taken by Indian Government to address unemployment

Key Terms related to Employment:

• Labor Force: The labour force is the part of the population that provides or offers to provide labour for economic activities to make goods and services. This includes both people who are working and people who are looking for work.
• Unemployment Rate: The unemployment rate is the number of unemployed people out of the total number of people who want to work.
• Labour Force Participation Rate (LFPR): The LFPR is the percentage of people in the working age group, which is usually 15 years and older, who are working or actively looking for work. It is based on their age.
• Worker Population Ratio (WPR): This is the number of people who are working out of the total population.
• Datasets about creating jobs
• Periodic Labour Force Survey (PLFS): This is a survey put out by the Ministry of Statistics and Programme Implementation’s National Statistical Office (NSO) (MOSPI).
  • The quarterly bulletin is for cities, while the annual PLFS report is for both rural and urban areas.
  • It figures out the most important employment and unemployment rates, such as the Worker Population Ratio, the Labour Force Participation Rate, and the Unemployment Rate.
• Consumer Pyramids Household Survey: This survey is done by the Centre for Monitoring Indian Economy (CMIE) to find out how households’ financial situations have changed in the past few months.

Analysis of the Annual Survey of Industries (ASI) for 2020-21 and 2021-22:

• Significance of the Survey:
  • The survey is a critical source of information on the registered organised manufacturing sector in the economy.
  • The analysis during the year 2020-21 and 2021-22 gains significance as it was marked by disruptions in economic activities on account of the pandemic. The survey helps in understanding how industry fared during those years.
  • It cover factories employing 10 or more workers using power and those employing 20 or more workers without power.
•  Data:
  • In 2020-21:
    • The gross value added grew by 8.8 per cent in 2020-21 (in current prices), after registering a fall the year before.
    • Growth in value added was driven by a sharper fall in input than output.
  • In 2021-22:
    • The economy rebounded in this year.
    • The value added grew by 26.6 per cent, with output growing at 35.4 per cent.
    • The industries that drove growth during 2021-22 were manufacture of basic metal, coke and refined petroleum products, pharmaceuticals, motor vehicles, and chemicals — value added by these industries grew by 34.4 per cent. Profits, also bounced back during this period.
  • The registered organised manufacturing sector grew at a faster pace than the unorganised sector in both the years.

Estimate of employment:

• During the first year of the pandemic (2020-21), total persons engaged fell marginally by 3.2 per cent compared to the figures in 2019-20.
• However, there was gradual rise in the employment thereafter.
• The main cause of concern is the pace at which quality jobs are being generated across all sectors at the aggregate all-India level.
• As per the data from the periodic labour force surveys, between 2017-18 and 2022-23, while the labour force participation rate saw a steady increase, a greater percentage of workers were self-employed, not engaged in regular salaried or casual wage employment.
• The share of workers that were self-employed rose from 52.2 per cent in 2017-18 to 57.3 per cent in 2022-23. However, this period witnessed a fall in the share of workers in manufacturing.
• Hence, this job dilemma will remain as a principle policy challenge.

Steps taken by Indian Government to address unemployment:

• Atma Nirbhar Bharat Rojgar Yojana (ABRY): It was started in 2020 as part of Atma Nirbhar Bharat package 3.0 to encourage employers to create new jobs, along with social security benefits to make up for jobs lost during the Covid-19 pandemic.
• National Career Service (NCS) Project: Its goal was to offer a variety of services related to careers, such as job matching, career counselling, vocational guidance, information on skill development courses, apprenticeships, internships, etc.
• PM SVANidhi: Its goal is to help street vendors get back to work after the Covid-19 lockdown by giving them affordable working capital.
• Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA): This law was meant to give every rural household whose adults volunteered to do unskilled manual work at least 100 days of guaranteed wage work in a financial year.
• Production Linked Incentives scheme: This is the main programme of the Ministry of Skill Development, and it plans to create 8 lakh jobs by 2025.
  • However, 50 million new people will be looking for work during this time. This means that PLI can’t solve unemployment all by itself.