Increasing Economic Activity and Social Security Among the Workforce. Despite unforeseen challenges, the Indian labor market has experienced a remarkable V-shaped recovery from 2004-05 to 2022-23, reaching its lowest point in 2017-18. This resurgence can be attributed to the concerted efforts of the Modi government in various key areas.
[irp]Government Initiatives and Welfare Schemes
An indispensable goal for any government pursuing economic growth is to enhance citizen participation in the labor force. The government’s welfare schemes and effective economic management, coupled with a surge in the labor force, contribute not only to an improved standard of living but also increased consumption and savings.
Key Labor Market Indicators
The National Sample Survey Office (NSSO) provides crucial labor market indicators such as the Labor Force Participation Rate (LFPR), Worker Population Ratio (WPR), and Unemployment Rate (UR). These metrics are pivotal for understanding the dynamics of the labor market.
Annual Labor Force Surveys
To address the need for more frequent data, an annual Periodic Labor Force Survey (PLFS) was introduced in July 2017. The latest sixth edition, covering July 2022 to June 2023, reveals encouraging trends for the Modi government.
Positive Trends in Labor Force Participation
The LFPR has seen a notable 8% increase from 49.8% in 2017-18 to 57.9% in 2022-23, showcasing a positive trend in employment participation.
Growth in Worker Population Ratio
The WPR, representing employed individuals as a percentage of the total population, has increased by 9.2% from 46.8% in 2017-18 to 56% in 2022-23, reaching a 13-year high.
Declining Unemployment Rate
The Unemployment Rate (UR) has decreased by 2.8% from 6% in 2017-18 to 3.2% in 2022-23, marking a consistent improvement in labor market conditions.
Inclusive Economic Growth
The PLFS data underscores the Modi government’s commitment to inclusive development, with all social and religious groups experiencing improvements in employment indicators across urban and rural areas and gender.
Job Growth and Workforce Distribution
The workforce has grown by an estimated 11.25 crore, dispelling concerns of jobless growth. The distribution across self-employed, salaried, and casual labor categories reflects positive dynamics.
Sectoral Shift in Workforce Distribution
A desirable shift towards productive sectors is observed between 2017-18 and 2022-23, with the share of workers in the industry sector increasing from 24.8% to 25.2%.
Social Security Initiatives
The Modi government has introduced various social security schemes benefiting self-employed and casual labor categories, emphasizing inclusive growth.
[irp]Conclusion
Despite unprecedented challenges, the labor market has exhibited resilience and recovery, attributing this success to the Modi government’s strategic initiatives. With the Indian economy poised to reach $7 trillion by 2030, the trajectory of labor market indicators is expected to continue on a positive trajectory, bolstered by sustained economic growth.
