India's unemployment rate has sharply declined to a record low, as per the latest findings by the SBI Research. The Periodic Labour Force Survey (PLFS) report delineates a fall from 6.1% in the fiscal year 2018 to 3.2% in 2023, signaling a major structural transformation within the Indian labor market. An analysis by SBI research suggests a rising trend in self-employment, which has seen an increase from 13.6% to 18.3% in the same period.
This shift is complemented by an upsurge in higher educational attainment and a growing inclination towards entrepreneurship across all walks of society.
While there has been a general decline, the rate remains highest among those with secondary and higher educational qualifications. This points towards a need for higher value-added jobs that can absorb India's educated youth.
The report highlights that the Indian society is moving away from traditional employment to more dynamic and self-sustaining business models.
The labor force participation rate, particularly among women, has seen a rise. The female labor force participation rate (LFPR) has surged from 17.5% to 27.8% from 2018 to 2023, with the most notable increase in the 15-29 age bracket. According to SBI research, the rise in female participation is a reflection of financial inclusion initiatives like the Pradhan Mantri MUDRA Yojana (PMMY), which has significantly increased the per woman disbursement amount and deposit figures.
However, the report also suggests that the distribution of
unemployment rates across different educational levels and states presents a complex picture.
In response to these shifts, there is a call to reinterpret old-fashioned rhetoric on unemployment. The SBI report stresses the need to look beyond the surface numbers and understand the underlying dynamics of the labor market, including the rise in gig economy jobs and the influence of technology on employment patterns.
Moreover, the role of educational attainment in shaping employment prospects is clear. The
unemployment rate among the literate population has shown a steady decline, underscoring the importance of education as a critical factor for employability in the contemporary market.
The state-wise analysis reveals a mixed bag, with significant improvements in some regions while others lag behind. This suggests that localized strategies may be necessary to address the unique challenges faced by different states.
To conclude, the Indian labor market is undergoing a significant metamorphosis, bolstered by the entrepreneurial spirit and higher education levels. The record-low unemployment rates are a promising sign, but they also mask the need for a nuanced understanding of the labor market's new dynamics. The path ahead calls for tailored policies that can sustain this growth, ensure equitable distribution across states and educational levels, and truly harness the potential of India's demographic dividend.
(Edited by : Anshul)
First Published: Nov 14, 2023 2:54 PM IST
