Modi govt survey reveals troubling drop in job quality

NT Correspondent Bengaluru A government survey has raised alarms over the quality of jobs in India, despite the national unemployment rate remaining steady at 3.2% in 2023-24. The latest findings from the Periodic Labour Force Survey (PLFS) reveal stagnation in manufacturing jobs and a growing reliance on low-paying agricultural work, sparking concerns about the country's employment landscape. Labour economist Santosh Mehrotra, quoted by The Telegraph, voiced apprehension about the significant rise in self-employment, primarily driven by unpaid family labor, particularly among women.

Mehrotra said this trend has severe implications for job quality and economic growth. "The increased involvement of women in unpaid work—be it on family farms or in small enterprises—is not a positive development," Mehrotra noted. The PLFS 2023-24, conducted by the National Sample Survey Office (NSSO), covered 101,920 households between July 2023 and June 2024. The data showed that nearly one-fifth of India’s employed workforce now consists of unpaid family labor. This category includes individuals who work in family enterprises without receiving wages, a segment that constitutes about one-third of the country’s self-employed workforce. The International Labour Organisation (ILO), however, does not classify unpaid family labour as formal employment, highlighting the gap in recognising these workers' contributions. Despite the worrisome findings on job quality, there were some positive takeaways from the survey.

A senior official from the Ministry of Labour noted that the proportion of regular salaried or wage-earning jobs has seen a modest increase, rising by nearly one percentage point in 2023-24. This is supported by data from the Employees’ Provident Fund Organisation (EPFO), which reported the creation of approximately 10 lakh formal jobs each month. However, Mehrotra argued that this incremental rise in formal employment is insufficient to counterbalance the growing informal sector, particularly in agriculture. The Worker-Population Ratio (WPR)—which indicates the proportion of the working-age population that is employed—rose from 56% in 2022-23 to 58.2% in 2023-24 for individuals aged 15 and above. Yet, this increase masks the underlying issue of job quality.

The survey found that 46.1% of India’s workforce was employed in agriculture in 2023-24, up from 45.8% the previous year. This marks a reversal of a long-standing trend where workers were gradually shifting from agriculture to more productive sectors like manufacturing and services.

Mehrotra explained that from the 1960s to 2004, the number of workers in agriculture steadily increased while their share in the total workforce decreased, as jobs in non-farm sectors expanded. But since 2019, this trend has reversed. Mehrotra attributes this shift to three major policy shocks: the 2016 demonetisation, the rushed implementation of the Goods and Services Tax (GST) in 2017, and the nationwide Covid-19 lockdowns. These shocks, he said, eroded non-farm employment opportunities, pushing millions of workers back into agriculture.
“Since 2019, we’ve seen nearly 6 crore workers return to agriculture, undoing decades of structural change where the workforce was transitioning to manufacturing and services,” Mehrotra said. He pointed out that employment in the manufacturing sector has decreased, which is particularly worrying for an economy that aims to boost industrial growth and innovation.

The survey also revealed a rise in self-employment, with the share of self-employed workers increasing from 55.8% in 2021-22 to 58.4% in 2023-24. Mehrotra described the increasing reliance on unpaid family labor as a deeply concerning development, particularly in rural areas where more women are returning to agriculture and family enterprises. "This trend is the opposite of what we saw from 2004-05 onwards when women were leaving agriculture and seeking better opportunities in other sectors," he said.

In addition, Mehrotra critiqued the government's production-linked incentive (PLI) schemes, saying they have failed to create the intended number of jobs, especially in the micro, small, and medium enterprises (MSME) sector.