Statsguru: Six charts show India's employment conundrum amid Covid-19

The government’s recently released Periodic Labour Force Survey (PLFS) 2020-2021 annual report paints an optimistic picture of employment despite pandemic-related uncertainties.

The survey was conducted between July 2020 and June 2021, which included the worst of the second wave. Unemployment showed a declining trend despite Covid-19, according to the report. Overall unemployment was down from 6.1 per cent in 2017-18 to 4.2 per cent in 2020-21. The 2017-18 annual report was the first one for the PLFS. Female unemployment fell from 5.7 per cent to 3.5 per cent during the same period (chart 1).

The labour force participation rate, or the proportion of the population which is either working or looking for work, also showed a rising trend, ending at 41.6 per cent in the latest report. The share of government employment, which includes local bodies and public sector enterprises, fell compared with 2017-18. The share of public and private limited companies was up (chart 2).

However, the share of people with a regular wage or salary dropped to the lowest of the four surveys so far, to 21.1 per cent (chart 3). Regular wage and salaried employees have seen an erosion of other benefits over the years with the majority now lacking access to any social security benefit at all (chart 4).

The dependency ratio is the number of economically dependent persons who are too young or old to work, per 100 persons who are of working age. India had a peak dependency ratio of over 81.5 in 1966, according to data available with the World Bank. This had dropped to 47.5 in 2017-18. The latest survey puts it at 44.3 (chart 5).

A higher share of workers can help bring economic prosperity as has happened in countries such as China, which used its surplus labour to fuel a manufacturing boom. But the share of manufacturing jobs in India has been falling despite the demographic tailwind from 12.9 per cent in 2017-18 to 10.9 per cent in 2020-21 (chart 6). The share of agriculture went up from 44.1 per cent to 46.5 per cent during the same period.

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