Unemployment in India rises 10.2% in two years

India must make employment a key driver of its growth strategy as higher economic growth does not create more jobs

June 21, 2013 12:21 IST | India Infoline News Service
A sharp slowdown in the economy has led to an increase in unemployment in India. The country's job market is not showing any sign of improvement.

The Monster Employment Index India exhibits a slight decline, annually. According to Monster.com, the decline is reflective of the cautious approach of the Indian employers owing to the global economic conditions. The Monster Employment Index is a monthly gauge of online job posting activity based on a real-time review of millions of employer job opportunities.

The Naukri Job Speak Index also suggested hiring has turned sluggish. The index, which which keeps track of monthly online hiring trends, fell around 4% to 1,317 in May compared with the previous month.

The job employment outlook for the next quarter (July-September) is the worst in eight years, a Manpower Global report said.

Job prospects in the transportation & utilities and mining & construction sectors have taken a beating, though in the retail and services sector, the employment scenario is expected to improve, said the Manpower report.

India's employment rate has slipped to 38.6% in 2011-12 (July-June) from 39.2% in 2009-10, a National Sample Survey Office (NSSO) survey for revealed on Thursday.

The employment rate was 42% in 2004-05. Over 54.2% of Indian workers are self-employed in rural areas in 2011-12 as against 41.1% in urban areas, and 38.6% work as casual labour compared to 17.5% in urban areas.

Only 15.6% are salaried employment. The number of unemployed rose 10.2% to 10.8 million in January 2012, from 9.8 million in January 2010, the NSSO further said.

Only 2.7 million new jobs were created in the five years between 2004-05 and 2009-10 — sharply lower than the 60 million jobs created in the previous five years.

All the data on job growth is disappointing in a country that already has more than 1.24 billion people. The worst is the most literate state also has the most unemployment in the country.

India must make employment a key driver of its growth strategy as higher economic growth by itself does not create more jobs, according to Washington-based Centre for American Progress that advocates sustainable development.

Average wage or salary in urban areas Rs. 365 per day is higher than in rural areas at Rs. 232, with men paid Rs. 377 and women Rs. 309 in urban areas, while it is Rs. 249 for men and Rs. 156 for women in rural areas, the NSSO data added.

The number of workers engaged in agriculture sector dipped below 50% of the overall workforce for the first time ever. The farm sector now accounts for 49% of the workers usually employed while manufacturing accounts for 24% and services 27%. However, the continuing decline in the labour force participation rate, which refers to the number of people in working age actively seeking jobs, is a worry.

More than half the manufacturing workers are in facilities without electricity.

The labour force participation rate (LFPR) declined to 39.5% in 2011-12 from 40% in 2009-10, suggesting the lack of job opportunities may be forcing people to study longer or simply drop out of the job market.

The country's economic growth decline to 6.2% in 2011-12 from 9.3% in 2009-10.

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