46.7 million new jobs created in FY24, total jobs up by 6 percent: RBI

According to the provisional data released by the central bank, the country added 46.7 million new jobs in FY24, taking the total to 643.3 million, up 6 percent from 596.7 million in FY23.
RBI (File Photo | PTI)
RBI (File Photo | PTI)

MUMBAI: There's something to cheer for the government in the latest employment data from the RBI, which contradicts the private sector data on jobs and the suggestions that poor job conditions were to blame for the not-so-impressive electoral numbers for the BJP in the just-concluded polls. According to the provisional data released by the central bank, the country added 46.7 million new jobs in FY24, taking the total to 643.3 million, up 6 percent from 596.7 million in FY23.

This is much more than the numbers dished out by private surveys like that of the CMIE. That the economy was having jobless growth has been the recurring theme of many analysts and opposition politicians.

“Provisionally, employment generation grew 6 percent or 46.7 million new jobs in FY24 as against 3.2 percent addition in FY23,” the Reserve Bank data on ‘measuring industry level productivity and employment’ showed Monday. The data on productivity and employment levels is an extrapolation of the government's own National Accounts and the numbers from the Union labour ministry.

On Monday, the RBI said it is attempting a provisional estimate of productivity for the total economy for the first time for FY24 based on officially available information. Also, the RBI data comes within a week of a critical report by the Wall Street brokerage Citigroup which said even a 7 percent GDP growth can only create 8-9 million jobs a year, far short of the 11-12 million needed in a country with such a large young population.

Many political analysts and economists blamed lack of jobs and high inflation as the main reasons for the BJP not getting a clear mandate in the just concluded Lok Sabha polls though the party went to the polls seeking over 400 seats in the 545-member House.

RBI (File Photo | PTI)
Economy nearing sustained 8% growth trajectory: RBI Governor Shaktikanta Das

The Citigroup economists in a weekend report said the country will not have enough jobs, even with 7 percent GDP growth—the RBI in its June review forecast that the economy will grow by 7.2 percent this fiscal, this was 20 bps more than the April forecast as the GDP grew at a surprisingly high 8.2 percent in FY24.

“The country will have to create about 12 million jobs a year over the next decade to absorb the number of new entrants to the labor market. Based on a growth rate of 7 percent, the country can only generate 8-9 million jobs a year,” the report said which also questioned the quality of the jobs being created as official data shows about 46 percent of the workforce still employed in agriculture, even though the sector contributes under-20 percent to GDP while manufacturing accounted for 11.4 percent of total jobs in 2023, a lower share than in 2018.

This had the Union labour and employment ministry earlier in the day dismissing the Citi report saying it “fails to account for comprehensive and positive employment data available from official sources such as the periodic labour force survey and the Reserve Bank’s KLEMS data” (released today). Generating over 8 crore jobs between FY18 and FY22 translates into an average of over 2 crore jobs per year.

The ministry further said official data has shown consistent improvements in the labour market indicators in the past five years and listed the EPFO and NPS data to further buttress its view that manufacturing, services, infrastructure and other emerging opportunities like gig and BPO centres are showing robust demand trends.

Many are of the view that the official unemployment rate of 3.2 percent for FY23 underestimates the scale of the problem, with most economists relying instead on data from the private sector research firm CMIE, which pegged the jobless rate in May 2024 at 9.2 percent, the highest in the past eight months. For those aged 20-24, the jobless rate is over 40 percent, according to CMIE, which also said the unemployment rate rose to 8 percent in FY24 from 7.5 percent and 7.7 percent in the previous two years.

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