India generated 46.7 million jobs in FY24, up 6%

The RBI on Monday said this estimate is much more than the numbers that private surveys such as CMIE have been dishing out pointing to the high unemployment rates.
Image used for representational purpose.
Image used for representational purpose.

MUMBAI: The latest Reserve Bank data showed the country has added 46.7 million new jobs in FY24 at 643.3 million, a rise of 6% over 596.7 million in FY23.

The RBI on Monday said this estimate is much more than the numbers that private surveys such as CMIE have been dishing out pointing to the high unemployment rates.

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

The RBI data — otherwise a routine release has traditionally only shown historic numbers — but on Monday the central bank said it is attempting a provisional estimate of productivity for the total economy for the first time for FY24 based on officially available information. The data came within a week of a report by brokerage Citigroup, which said even a 7% GDP growth can only create 8-9 million jobs a year, far short of 11-12 million needed in a country with so much 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 polls seeking over 400 seats.

Citigroup economists in a weekend report said India will not have enough jobs, even with 7% GDP growth. RBI in its June review forecast the economy will grow 7.2% this fiscal, this was 20 bps more than the April forecast as the GDP printed in a surprisingly high 8.2% in FY24.

The City report questioned the quality of the jobs being created as official data show about 46% of the workforce still employed in agriculture, even though the sector contributes under-20% to GDP while manufacturing accounted for 11.4% of total jobs in 2023, a lower share than in 2018.

The Union labour and employment ministry earlier in the day dismissed the Citi report saying the brokerage report “fails to account for comprehensive and positive employment data available from official sources such as the periodic labour force survey and the RBI’s KLEMS data(released on Monday). ” Generating over 8 crore jobs between FY18 and FY22 translates into an average of over 2 crore jobs per year. The ministry said there are consistent improvements in the EPFO and NPS data.

Many are of the view that official unemployment rate of 3.2% 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 20224 at 9.2%, the highest in the past eight months. For those aged 20-24, the jobless rate is over 40%, as per CMIE, which also said the unemployment rate rose to 8 percent in FY24 from 7.5% and 7.7% in the previous two years.

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