Positive Economic Growth Hasn't Led to a Radical Structural Transformation in Employment: ILO

In its latest report, the International Labour Organization has said that employment in India is predominantly self-employment and casual employment. It also noted that despite the presence of positive economic growth, India has not witnessed a substantial overhaul in its employment conditions. Reports ETV Bharat's Saurabh Shukla

New Delhi:Despite the presence of positive economic growth, India has not witnessed a substantial overhaul in its employment conditions, as highlighted by the International Labour Organization (ILO). In its latest report ILO said that employment in India is predominantly self-employment and casual employment.

Nearly 82 per cent of the workforce engages in the informal sector, and nearly 90 per cent is informally employed. According to the 'India Employment Report 2024', due to the nature of employment growth since 2019, the share of total employment, which is in the informal sector and/or in informal employment, increased.

The report's employment condition index prepared for this report and based on seven labour market outcome indicators indicated that between 2005 and 2022, there was a slow but steady increase in values, indicating improvement in employment conditions. But again, this trend was halted – and even reversed after 2019 – after onset of the COVID-19 pandemic. Notwithstanding the modest improvements, employment conditions remain poor.

Decline in Wages
Regarding wages, the report noted, "while wages of casual labourers maintained a modest upward trend during 2012–22, real wages of regular workers either remained stagnant or declined. Self-employed real earnings also declined after 2019. Overall, wages have remained low. As much as 62 per cent of the unskilled casual agriculture workers and 70 per cent of such workers in the construction sector at the all-India level did not receive the prescribed daily minimum wages in 2022."

Educated Female youths more unemployed
The report also highlights concerning trends in youth unemployment. It said that the youth unemployment rate has increased with the level of education, with the highest rates among those with a graduate degree or higher. Also it is higher among women than men. In 2022, the unemployment rate among youths was six times greater than among persons with a secondary or higher level of education (at 18.4 per cent) and nine times greater among graduates (at 29.1 per cent) than for persons who cannot read and write (at 3.4 per cent). Educated female youths experienced higher levels of unemployment compared with educated male youths.

Employment Growth
Between the year 2000 and 2012, employment in India experienced an annual growth rate of 1.6 per cent, while gross value added grew at a much faster rate, at 6.2 per cent. This pattern was intensified between 2012 and 2019, when gross value added continued to grow at 6.7 per cent, but employment growth was nearly negligible, at 0.01 per cent. After 2019 and due to the COVID-19 pandemic, there was a substantial increase in employment, with agricultural employment growth even outpacing the growth in agriculture gross value added, the report stated.

Demographic dividend
A large proportion of the population is of working age, and India is expected to be in the potential demographic dividend zone for at least another decade. But the report pointed out that the country is at an inflexion point because the youth population, at 27 per cent of the total population in 2021, is expected to decline to 23 per cent by 2036. Each year, around 7–8 million youths are added to the labour force whose productive utilisation could lead to India reaping a demographic dividend.

Young men leaving agriculture work in India
The report also pointed out that the youth have been relatively less engaged in agriculture and more engaged in industry and services. As youth grow older and acquire higher levels of education, they are more likely to engage in non-farm activities.

Young women are more likely to engage in agriculture than young men. In tertiary sector activities, such as trade, hotels and restaurants, public administration, health and education and transport, storage and communication, there is a large gender gap in favour of men, it noted.

The India Employment Report 2024 is the third in the series of regular publications by the Institute for Human Development on labour and employment issues. This report on youth employment, education and skills examines the challenge of youth employment in the context of the emerging economic, labour market, educational and skills scenario in India and changes over the past two decades.