Growth in Jobs in FY23

Context:

As per estimates being prepared by the Reserve Bank of India (RBI), the number of people in jobs grew nearly 5% to 580 million in the financial year 2022-23. 

More on News:  

• These growth numbers of jobs will form part of the RBI’s KLEMS database, based on an analysis of the Periodic Labour Force Survey (PLFS) data for the same period.
• According to the KLEMS database, (last year released), in the initial findings, the number of employed people grew by about 30 million from 553 million in 2021-22.
• The KLEMS database of this year is expected to be released by the RBI in a couple of months.

About KLEMS & PLFS Data:

• Refers: KLEMS gives granular/detailed data on the inputs used in the production process and the output generated by an economy, while PLFS data provides information on the size and composition of the labour force, employment trends across different sectors and demographic groups, and unemployment rates.
  • The PLFS data encompasses all sectors, covering a wide spectrum of employment types such as organized, unorganized, self-employed, and agricultural workers.
  • The KLEMS Data provides insights into five key inputs in production—capital (K), labour (L), energy (E), materials (M) and services (S).
  • KLEMS data follows the release of the PLFS data, which is usually published in October every year. 
• Significance: Both sets of data are important for understanding different aspects of the economy and formulating appropriate policies.

Crucial Insights on Estimates being prepared by the Reserve Bank of India (RBI):

• Better Growth: India has seen a growth of 110 million jobs over the last 5 years, starting from 470 million in 2017-18.
• Sectors of Growth: As per KLEMS data for 2021-22, the highest 237 million jobs were created in agriculture and allied sectors, followed by 68 million jobs in construction and 63 million in trade. 
  • The lowest 324,000 jobs were in industries involved in manufacturing refined petroleum products. 
  • The plastics industry generated 1.32 million jobs.
• Reopening Post-Covid: The estimated increase of around 27 million between the two years is a significant number. This increase is significant because both the organized and unorganized sectors were severely affected during the covid pandemic.
  • This increase indicates that many activities have returned to normal, especially in contact-intensive sectors, which began reviving in 2022-23.
  • These are not new job opportunities, but rather the reopening of job opportunities that were closed during the pandemic. Therefore, it cannot be considered as momentum. Instead, it indicates that our economy is recovering from the covid year.
    • Considering that the previous year was the covid year, during which employment was seriously affected, leading to an increase in the unemployment rate to 9%, compared to our normal rate of 3%.
• Significant Decline: The figures reflecting returning jobs rather than new ones. 
• According to the PLFS, the unemployment rate among female workers saw a decline from 5.6% in 2017-18 to 2.9% in 2022-23. 
  • However, among the youth, including women, the unemployment rate has come down from 17.8% in 2017-18 to 10% in 2022-23.