India's Employment Landscape: Insights and Strategies from ILO Report

A significant observation highlighted in the report is the long-term deterioration of key metrics such as the labour force participation rate, workforce participation rate, and unemployment rate between 2000 and 2019.  

Syed Hassan Kazim
New Update
Unemployment report

India, a nation characterized by its rich diversity and vitality, grapples with a multifaceted employment landscape influenced by global trends and unique socio-economic factors.


In our exploration of India's labour market intricacies, insights gleaned from esteemed organizations like the International Labour Organization (ILO) serve as guiding beacons, illuminating key challenges and offering strategic pathways towards addressing unemployment.


As a cornerstone in comprehending unemployment dynamics, both globally and within India, the International Labour Organization (ILO) provides invaluable insights into the complexities of the labour market.


The latest iteration of the ILO Employment Report for India in 2024 has unveiled critical aspects of the country's labour market dynamics. Drawing from extensive data derived from the National Sample Surveys and the Periodic Labour Force Surveys spanning from 2000 to 2022, with a postscript for 2023, the report presents a holistic overview of India's employment landscape.


A significant observation highlighted in the report is the long-term deterioration of key metrics such as the labour force participation rate, workforce participation rate, and unemployment rate between 2000 and 2019.


However, the report brings to light a noteworthy improvement in these indicators thereafter, indicating a positive shift in the employment scenario in recent years. Notably, this improvement coincides with periods of economic distress, including the time before and during the Covid-19 pandemic, underscoring the resilience of India's labour market amidst challenging circumstances.


Historical Perspectives


According to the ILO's assessments, India's unemployment narrative has witnessed fluctuations over the years. While the early 2000s boasted a relatively stable unemployment rate, the situation took a downturn post-2010, culminating in a peak by 2019. Previous years' ILO data indicate that India's unemployment rate was influenced by a myriad of factors, spanning economic reforms, technological advancements, and global economic vicissitudes.


Present Realities


India's employment panorama reflects global apprehensions but is compounded by indigenous hurdles. The recent "India Employment Report 2024," a collaborative effort between the Institute for Human Development (IHD) and the ILO, underscores persistent challenges despite modest advancements in select metrics.


Youth and Women Unemployment


The youth and women grapple with stark job scarcities in India. Despite a declining youth population proportionally, the annual influx of 7-8 million youths into the workforce exacerbates the issue. The report highlights a troubling trend where the proportion of educated young individuals with at least secondary education among the total unemployed youth has almost doubled from 35.2 percent in 2000 to 65.7 percent in 2022.


Concurrently, women encounter disproportionate unemployment rates, echoing gender fissures in workforce participation. Reports underscore the disproportionate toll of unemployment on India's youth and women. Despite attaining higher education levels, youth unemployment persists at disconcerting levels. Similarly, women face formidable barriers to workforce ingress, perpetuating gender imbalances in employment involvement.


Persistent Dropout Rates and Quality Concerns


The report indicates that dropout rates following secondary education remain elevated, especially in economically disadvantaged states and among marginalized communities. Despite an increase in enrollment in higher education, concerns about quality persist, with noticeable learning deficiencies observed at both school and higher education levels.


Quality of Employment


While there's been a surge in labour force participation and employment rates, the caliber of jobs remains a concern. A notable chunk of employment expansion is witnessed in self-employment and unpaid family labour, especially among women. Additionally, youth employment often lacks stability and decent remuneration, perpetuating susceptibility.


Wage Stagnation


Wages for both regular workers and self-employed individuals have mostly stagnated or decreased since 2019, leading to a negative trend in real wages. Additionally, a significant number of unskilled casual workers failed to receive the legally mandated minimum wages in 2022.


Policy Prescriptions


The IHD-ILO report delineates following pivotal policy domains for addressing India's unemployment conundrum:


Promoting Job Creation: Initiatives fostering an enabling environment for job generation across sectors are imperative.


Improving Employment Quality: Ensuring that generated jobs offer stability, fair wages, and social security.


Addressing Labour Market Inequities: Mitigating disparities in employment opportunities, particularly for marginalized cohorts, through targeted interventions.


Strengthening Skills and Active Labour Market Policies: Enhancing skill development schemes and instituting robust policies facilitating labour market transitions.


Bridging Knowledge Gaps: Investing in research and data-driven policymaking to comprehend labour market dynamics, especially concerning youth employment.


Strategies for Mitigating Disparity


A multifaceted approach is indispensable for effectively tackling India's unemployment challenge:


Skill Development: Aligning educational frameworks with industry requisites to enhance employability.


Entrepreneurship Promotion: Encouraging entrepreneurship via initiatives like Skill India and Pradhan Mantri Kaushal Vikas Yojana (PMKVY) to foster fresh job prospects.


Labour Market Reforms: Streamlining labour regulations to attract investment and stimulate job creation, particularly in labour-intensive sectors.


Technological Advancement: Embracing digital transformation to spawn new employment avenues, especially in the IT sphere, through initiatives promoting digital literacy and technology accessibility.

Addressing India's unemployment ordeal warrants a holistic strategy rooted in comprehending underlying causes and harnessing growth opportunities. By enacting targeted policies prioritizing skill development, entrepreneurship encouragement, and technological assimilation, India can unlock its full potential and forge a more luminous, inclusive future for its workforce. Synergistic endeavors between public and private sectors are pivotal in actualizing this vision and fostering sustainable economic progression.