The quality and quantity of jobs are alarming in India’s economy
Efforts must be made to improve the quality of jobs, not the quantity, as India transitions to a middle-income economy.
This is the right season to adjust GDP growth. Several agencies have revised India’s GDP forecast for 2023-24 to 6.2% to 6.7%. India remains one of the bright spots in the context of major economies like China, the UK and Europe slowing down or heading towards recession. On the other hand, preliminary estimates indicate that India’s GDP in the second quarter will grow by about 6.5% thanks to the decent recovery in the first quarter. While continued sales during the year-end holidays will stimulate domestic private consumption, the continued increase in public investment spending as well as the potential for a jump-start in the private investment cycle will remain, with growth momentum maintained throughout the remainder of operations.
Although we expect positive growth, job creation remains a major concern. The overall unemployment rate rose from 7.09% in September to 10.05% in October, the highest monthly rate since May 2021, according to CMIE special forecasts. The data comes just weeks after the Prime Minister announced that employment has reached a new high and unemployment is at its lowest levels in six years. His comments, ahead of a busy election season, were confirmed by official data last month, which showed the unemployment rate falling to a six-year low of 3.2% between May-July 2022 and June 2023. This is a sharp change after the Periodic Labor Force Survey (PLFS) revealed for the first time that unemployment was at its highest levels in four decades in 2017-18. As growth returns, the benefits of development are expected to accrue equally to villages and towns, but as CMIE data for October showed, rural unemployment was higher last month than in urban areas.
As the PLFS data themselves confirm, the share of low-quality jobs has increased alongside the rise in informal employment. A large number of male non-agricultural workers continue to work in informal jobs alongside women. Manufacturing has the potential to create much-needed high-quality jobs, but this potential has not been realized for decades. Even if we are fortunate to have increased production capacity, thanks to technological developments and increased automation, the amount of jobs created may not be significant. For a large developing country like India, a certain number of unemployed people is inevitable. Whether or not this issue becomes a decisive issue in the elections, efforts must be made to improve the quality of jobs rather than quantity as India transitions to a middle-income economy.
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