There is more to India's mystery of raised employment post-pandemic
Bank of India (RBI) forecasts retail inflation to average 5.4% in 2024-25. That would make it four straight years of higher inflation than RBI’s target of 4%. While inflation remains on the higher side, economic growth, though robust, has not been in double digits since the pandemic and was muted before that, but India’s employment rate has increased, according to Periodic Labour Force Surveys (PLFS) data.
The worker-population ratio (WPR), measured by ‘usual status,’ for 15+ years increased to 56 per 100 in 2022-23 from 46.8 in 2017-18. The WPR for women rose to nearly 36 from 22, driven by more rural women taking up farm work. For men too, the WPR increased to 76 from around 72 over this period.
The unemployment rate has also halved to just above 3%. The higher WPR means about 100 million more Indians found work between 2017-18 and 2022-23, on top of those who were already employed. The exact numbers differ—a bit higher or lower—depending on the population projections used, but this is a vast increase in employment—four Australias or two times South Korea’s entire population.
Many new workers are women and are working on farms. However, the level of employment in the regular wage sector also rose during this period by about 13 million or so, albeit it recorded a decline in its share by about 2 percentage points in total employment to about 21% in 2022-23. Higher inflation put a strain on family budgets, prompting more people, especially women, to take up paid work.
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