Human Capital Issues

Employment and Unemployment Scenario in India

India is going through a very challenging phase right now. The rupee is riding on the low wave, inflation is plaguing industrial growth, the GDP of the country is struggling below five, the economy is on a jobless growth, and investor sentiment is not something to be proud of. The number of jobs available is at a pathetic low point and elasticity of employment is almost zero. Nevertheless, there is a slim silver lining to the huge black cloud looming over the country. With economy showing signs of revival, employment figures are set to paint a rosier picture.

What do government surveys and reports show?

According to the recent NSSO survey, 2011 – 12 provided 13.9 million more jobs when compared to 2009 – 10.
The percentage of salaried people in India has increased from 15.6 percent to 17.9 percent. Also, underemployment has decreased by 1 percent from 6.6 percent to 5.6 percent. The quarterly survey of Labour Bureau threw light on the fact that in 2011 alone, nearly 6.5 lakh jobs were created.

The survey showed the self employment dominates over employment in corporate or government sector. In India, self employment is the major source of income for 51.2 percent households. Combined with casual and temporary labour, this figure increases to almost 80 percent. This implies that nearly 80 percent people in India do not have a reliable salaried job.

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In India, Sikkim registers highest employment rate while Chattisgarh registers the lowest figures. In Sikkim, there are 136 unemployed for every 1000 people. In Chattisgarh, there are only 14 unemployed people for every 1000. These statistics are provided in the 2012 – 13 Annual Employment and Unemployment Survey report released by the Labour Bureau.

Comparing urban and rural india, the report showed that unemployment is higher in the urban areas. While 4.4 percent of people are unemployed in the rural areas, urban areas register 5.7 percent unemployment. One of the reasons for this trend could be the struggling corporate and private sector. With right-sizing being implemented in most of the private sector companies, not only is there a scarcity of employment opportunities, but currently employed people also have a sword dangling over their jobs.

The Labour Bureau, comparing unemployment rates between men and women, said that more women are unemployed than men. While 4.4 percent of men are employed, the figure increases to 7.2 percent when it comes to women.

The downside

Although these statistics do seem encouraging at the outset, it is not actually as rosy as it seems. For one, the unemployment rate of India is at 4.7 percent, which is one of the highest in the world.

According to Pronab Sen, the Chairman of National Statistical Commission, most of the new jobs created are of poor quality. This means that a majority percentage of new jobs are low productivity jobs. Nearly 66 percent employees work in companies that have six or less number of employees.

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Industry experts say that the biggest concern in Indian employment scenario is not lack of jobs but lack of skills. As Chanda Kochchar, CEO of ICICI recently remarked, there are a lot of “generalists” in India but very few people with specific employability skills. The HRD Ministry concurred with Kochchar’s statement and said that only 14 percent of the total Indian workforce has found employment in the organised sector in 2013.

In the near future, especially after the next general elections, things are likely to improve.  The government needs to shift focus to generating jobs and ensure that the country does not go through another phase of jobless growth because such growth is never sustainable.