Joblessness in India

May 25, 2024

What’s in Today’s Article?

Background:

In April this year, CSDS-Lokniti, a research organisation tracking the behavior of India’s voters for decades, came out with the results of its pre-poll survey.
It found that the single most important issue for voters in 2024 is unemployment.
According to 29% of the people surveyed, unemployment will be the biggest factor as they decide their vote.
The second biggest issue was price rise; as many as 23% of the people surveyed said it was the biggest factor.
These two issues were found to be the most important ones by 52% of the people surveyed.

What is Unemployment & LFPR?

According to the CMIE, the labour force consists of persons who are of age 15 years or older, and belong to either of the following two categories:
- Employed
- Unemployed and are willing to work and are actively looking for a job
There is a crucial similarity between the two categories — they both have people “demanding” jobs. This demand is what Labour Force Participation Rate (LFPR) refers to.
While those in category 1 succeed in getting a job, those in category 2 fail to do so.
Essentially, LFPR is the number of people ages 15 and older who are employed or actively seeking employment, divided by the total non-institutionalized, civilian working-age population.
- LFPR represents the demand for jobs in an economy.
On the other hand, Unemployment Rate (UER) is nothing but the number of unemployed (category 2) as a proportion of the labour force.
- All over the world, the UER is often the most widely used metric to assess the health of the labour market.
Employment Rate (ER)is the ratio of the total number of employed people and the total size of the working-age population.

Religion-wise Data From the Survey:

Religion-wise Working-Age Population:
- India’s working-age population grew from 96.45 crore in 2016-17 to 113.86 crore in 2023-24.
- Hindus make up 86% of the working age population. Muslims account for 9.54% of the working age population.
Religion-wise LFPR:
- India’s overall LFPR was low in 2016-17 and has further declined by 5.8% over the past eight years.
- The percentage of working-age Hindus openly looking for a job has fallen from 46.6 per cent in 2016-17 to just 40.53% as of March 2024.
Religion-wise UER:
- Given that almost 86% of the working age population is Hindus, the UER among Hindus influenced the overall UER.
- It was highest in the Covid year 2020-21 at 8.73%, but dropped by more than a percentage point over the next two years to 7.59% in 2022-23, and rose to 8.07% in 2023-24.
- The unemployment rate among Muslims was highest among all communities in 2016-17 at 8.79%. It was lowest at 5.31% in 2017-18, and hit 9.22% in the Covid year, 2020-21.
Religion-wise ER:
- India’s overall ER fell by 5.6 percentage points over the past eight years.
- In other words, the proportion of working-age Indians with a job dropped from 42.8% in 2016-17 to 37.2% in 2023-24.
- The employment rate among Hindus fell the most — almost 6 percentage points to 37.26% in 2023-24.

Caste-Wise Data From the Survey:

Caste-wise Working-Age Population:
- Almost 60% of the total working-age population belongs to the OBCs and another 23% is accounted for by SCs.
Caste-wise LFPR:
- The LFPR has fallen for all castes. Upper-caste Hindus have the lowest LFPR.
Caste-wise UER:
- The UER among upper castes was 8.62% in 2016-17, but at 9.83% in 2023-24, almost touched double-digits.
Caste-wise ER:
- The OBCs and SCs, which had much higher ER compared with the upper caste in 2016-17, were the worst affected with their ERs in 2023-24 lower by 6.36 percentage points for both the categories.
- The upper caste Hindus had the lowest employment rate in 2016-17 and even in 2023-24 it remains the lowest amongst all caste categories.

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