The United Nations International Labour Organisation (ILO) released its 2017 World Employment and Social Outlook report on Janauary 13, 2017, which finds economic growth trends lagging behind employment needs and predicts both rising unemployment and worsening social inequality throughout 2017.
According to the UN labour report, unemployment in India is projected to witness marginal increase between 2017 and 2018, signalling stagnation in job creation in the country. Unemployment in India is projected to increase from 17.7 million last year to 17.8 million in 2017 and 18 million next year. In percentage terms, unemployment rate will remain at 3.4 per cent in 2017-18.
The report says that job creation in India is not expected to pick up pace in 2017 and 2018 as unemployment rises slightly, representing a near stagnation in percentage terms. India had performed slightly well in terms of job creation in 2016, when a “majority” of the 13.4 million new employment created in Southern Asia happened in the country. The report also acknowledged that India’s 7.6 per cent growth in 2016 helped Southern Asia achieve 6.8 per cent growth that year. It further said that manufacturing growth has underpinned India’s recent economic performance, which may help buffer demand for the region’s commodity exporters.
The report added that global unemployment levels and rates are expected to remain high in the short term, as the global labour force continues to grow. In particular, the global unemployment rate is expected to rise modestly in 2017, to 5.8 per cent (from 5.7 per cent in 2016) – representing 3.4 million more unemployed people globally (bringing total unemployment to just over 201 million in 2017). The increase in unemployment levels and rates in 2017 will be driven by deteriorating labour market conditions in emerging countries – as the impacts of several deep recessions in 2016 continue to affect labour markets in 2017.ILO Director-General Guy Ryder said, “We are facing the twin challenge of repairing the damage caused by the global economic and social crisis and creating quality jobs for the tens of millions of new labour market entrants every year.”
India’s own statistics also confirm increase in unemployment
According to a Labour Bureau report, unemployment rate in India has shot up to a five-year high of 5 per cent in 2015-16, with the figure significantly higher at 8.7 per cent for women as compared to 4.3 per cent for men. This is despite several government measures including ‘Make in India’ to create jobs for inclusive growth in the country.
According to the fifth annual employment-unemployment survey at all-India level, about 77 per cent of the households were reported to be having no regular wage/salaried person. It said the unemployment rate was estimated to be 5 per cent at all-India level under the UPS (Usual Principal Status) approach. Unemployment rate was 4.9 per cent in 2013-14, 4.7 per cent (2012-13), 3.8 per cent (2011-12) and 9.3 per cent (2009-10). Labour Bureau did not bring out any such report for 2014-15.
The report further said that in rural sector, unemployment rate was 5.1 per cent whereas in urban sector, the rate was 4.9 per cent under the UPS (usual Principal and subsidiary) approach. The figure was significantly higher among females compared to males. Female unemployment rate was estimated to be 8.7 per cent, whereas for males it was 4.3 per cent.
In urban areas, female unemployment rate was estimated to be 12.1 per cent at pan-India level compared to 3.3 per cent for males and 10.3 per cent for transgenders. The survey was conducted across all states and union territories during April 2015 to December 2015. A total sample of 1,56,563 households were covered in the survey – 88,783 households in the rural sector and 67,780 in the urban sector.
Topping the chart among the states and union territories was Tripura (19.7 per cent) followed by Sikkim (18.1 per cent), Lakshadweep (16.1 per cent), Andaman & Nicobar islands (12.7 per cent), Kerala (12.5 per cent) and Himachal Pradesh (10.6 per cent).
Sources of Data on unemployment in India
There are five sources of employment / unemployment statistics in India viz. NSSO, Economic Census, Employment Market Information Programme of DGET, Registrar General of India and Labour Bureau. The NSSO (National Sample Survey Office) releases its survey-based employment results every five years. It includes both organised and unorganised sector employment. Central Statistics Office (CSO) releases the ‘Economic Census’ every five years, which also provides survey-based data on employment but only with respect to establishments in the organised and unorganised sectors. Labour Bureau, Ministry of Labour and Employment, releases the ‘Annual Survey of Industries (ASI)’, covering employment in the organised sector as well as the ‘Quarterly Report on Changes in Employment in Select Sectors’. While the NSSO, Economic Census and ASI offer state-level data, the quarterly publication releases sector-wise details.
There is however problem in comparison of unemployment data in India from various sources. If we take data of 20111-12 this becomes very clear. According to Employment & Unemployment Survey (2011-12) conducted by Labour Ministry, all-India unemployment rate was 3.8 percent. This figure was in contrast with ILO (International Labour Organisation) data of 2011 which said that India’s 6% population is unemployed. Out of this 3.8, male unemployment stands at 2.9% while female stands at 6.9%. Highest unemployment rate is in Goa (17.9%) followed by 14.1% in Tripura, 12.6% in Sikkim, 9.9% in Kerala, 8.3% in Bihar and 7.8% in West Bengal.
Employment-unemployment (EU) survey report (Oct 2016) conducted by the Labour Bureau pointed out that Joblessness in India is running at a five-year high of 5% of the 15-plus-years work force. Over a third of working people are employed for less than a year and 68% of households are earning up to only Rs 10,000 per month. Over 7.8 lakh persons in 1.6 lakh households were surveyed across the country between April and December 2015. According to the Survey, urban areas continue to provide more and better paying jobs compared with the rural areas. While 82% of job seekers get year-round jobs in urban areas, just 53% of rural job seekers manage to get such security.
About 42% of workers in rural areas work for less than 12 months in a year, a result of dependence on seasonal agriculture work. This means that 77% of the rural households end up with an average monthly income of less than Rs 10,000. In urban areas, about half the households earn between Rs 10,000 and Rs 50,000 per month.
The National Sample Survey Office (NSSO) conducted a survey on employment and unemployment in 2011-12 (the 68th round of NSSO and the Socio-Economic & Caste Census (SECC) in 2011-12). According to the NSSO data released on February 19, 2016, the unemployment rate in urban areas reduced from 4.5 per cent in 2004-05 to 3.4 per cent in 2011-12. In rural areas, the rate has been stable at around 1.7 per cent during this period. Unemployment rate is defined as the number of persons unemployed as a proportion of the labour force (persons who are either ‘working’ or ‘seeking or available for work’), not the total population.
Some of the findings of NSSO report (68th Round) are as follows:
- The present report is based on a sample survey conducted across 7,469 villages and 5,268 urban blocks, covering 1.01 lakh households and enumerating 4.56 lakh individuals.
- The report states that the unemployment rate is 1.7 per cent in rural and 3.4 per cent in urban areas. In its previous report of 2013, unemployment rate was 1.5 per cent in rural and 4.8 per cent in urban areas.
- NSSO report said that the unemployment rate across all the religious groups in rural areas was on the lower side than those in urban areas for both males and females.
- Unemployment rate in rural India for Hindus rose from 1.5 per cent in 2004-05 to 1.6 per cent in 2011-12, during the same period it rose from 2.3 per cent to 2.6 per cent for Muslim population, from 4.4 per cent to 4.5 per cent for Christians and it declined from 3.5 per cent to 1.3 per cent for Sikh population.
- Unemployment rate in urban India for Hindus declined from 4.4 per cent in 2004-05 to 3.3 per cent in 2011-12, during the same period it declined from 4.1 per cent to 9 per cent for Muslim population, from 8.6 per cent to 5.9 per cent for Christians and it declined from 4.6 per cent to 3.8 per cent for Sikh population.
- Unemployment level in India is highest among those people who are richer and more educated. The reason is that poor people can’t afford to stay unemployed, and hence, opt for any kind of work, irrespective of the nature of the job. The better off have the capacity to be unemployed as they look for the right job. Christians are the most educated group, hence unemployment rate is higher among them.
- In rural India, 22.3 per cent of males and 47.5 per cent of females are illiterate. In urban India, the number stands at 9.9 per cent for males and 22.6 per cent for females.
- Among the persons of age 15 and above, the proportion of people who are not literates was the lowest for Christians. Also, the proportion of persons with educational level secondary and above is highest for Christians.
- Self-employment is the major source of income for almost half the households, across all religious groups, in rural areas, followed by casual labour.
- In urban areas, the proportion of households deriving major income from regular wage or salary earnings is the highest. Half the Muslim households in urban areas have self-employment as major source of income, the highest among all religions, while regular wage or salary earnings was the highest for Christians with 45.8 per cent households.
- The LFP in rural India is 406 per 1000 individuals and 367 in urban areas. For Muslims, however, it is abysmally low at 337 in rural and 342 in urban areas.
- The Labour Force Participation (LFP) remains the poorest for Muslims in the country. Labour force, or the “economically active”, refers to the population that supplies or seeks to supply labour for production of goods and services and therefore, includes both the “employed” and the “unemployed”.
- Of those who are employed in rural areas, a majority are self-employed — 54.5 per cent rural males and 59.3 per cent rural females.
- In rural India, the number of self-employed stands at 41.7 per cent for male and 42.8 per cent for females. Also, the highest self-employment is seen in Christian males at 56.6 per cent and Sikh females at 79 per cent.
- In urban India, the highest self-employment is seen among Sikhs and Muslim males at 52.8 per cent and Muslim females at 61.3 per cent.