Millions of Indians are leaving the job market completely in India, as they are not even looking for a job, according to data from private research firm Centre for Monitoring Indian Economy Pvt. Between 2017 and 2022, the overall labor participation rate dropped from 46 per cent to 40 per cent.
Now, more than half of the 90 crore Indians of legal working age — roughly the population of the US and Russia combined — don’t want a job, according to the CMIE.
“The large share of discouraged workers suggests that India is unlikely to reap the dividend that its young population has to offer. India will likely remain in a middle-income trap, with the K-shaped growth path further fueling inequality,” according to a Bloomberg report quoting Kunal Kundu, an economist with Societe Generale GSC Pvt in Bengaluru.
To keep pace with a youth bulge, India needs to create at least 9 crore new non-farm jobs by 2030, according to a 2020 report by McKinsey Global Institute. That would require an annual GDP growth of 8-8.5 per cent, according to the report.
“Women do not join the labor force in as many numbers because jobs are often not kind to them. For example, men are willing to change trains to reach their job. Women are less likely to be willing to do that. This is happening on a very large scale,” said Mahesh Vyas of CMIE, according to the report.
Recently, retirement fund body EPFO also said it added 14.12 lakh subscribers in February 2022, 14 per cent more than 12.37 lakh enrolled in the same month a year ago. “The provisional payroll data of EPFO released today highlights that EPFO has added 14.12 lakh net subscribers in the month of February 2022,” the labour ministry said in a statement.
The Employees’ Provident Fund Organisation (EPFO) data showed that net enrolments between April 2021 and February 2022 were 1.11 crore. During the entire financial year 2020-21, the net enrolments were 77.08 lakh, lower than 78.58 lakh added in 2019-20.
The net subscriber addition was 13,79,977 in January 2022 and 12,37,489 in February 2021. The statement said that there has been a consistent increase in the net subscriber addition since October 2021, showcasing trust in the services rendered by the organisation.
For women, the reasons sometimes relate to safety or time-consuming responsibilities at home. Though they represent 49 per cent of India’s population, women contribute only 18 per cent of its economic output, about half the global average.
Gender-wise analysis indicates that net female payroll addition during the month is approximately 3.10 lakh. The share of female enrolment is 21.95 per cent of the total net subscriber addition during February 2022, up 22,402 over the previous month.
Since April, 2018, the EPFO has been releasing payroll data covering the period from September 2017 onwards.
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