India's working population, or those between ages 15 and 64, surged to 971 million, according to the UN.
But there's little to cheer, as a rapidly growing workforce only implies swelling unemployment worry glands for the government.
Right now, there's no surest way to know if more Indians are getting paid or getting laid-off. A salad of statistics exist on the country's working population, labour force and unemployment rate, but none produce identical numbers as the survey methodologies aren't uniform and most estimates wind up in a public debate.
For instance, if the UN estimated India's working population (15-64) at 960 million in 2022, the International Labour Organization (ILO) pegged it at 788 million. In contrast, the government's own Periodic Labour Force Survey (PLFS) estimated the number of people between 15-59 (not 15-64) at 740 million in July 2022.
Not all 15-64-year-olds are part of the labour force, defined as those who are either working or looking for work. Some abstain from seeking employment for various reasons like pursuing higher studies and excluding this lot gives us the Labour Force Participation Rate (LFPR) or the total labour force of a country.
India's labour force according to official estimates stood at 477 million in July 2022, the World Bank pegged it at 524 million, while private forecaster CMIE believes it sunk lower at 439 million in FY23, below the pre-pandemic level of 442 million in FY20.
Regardless of the variance in estimates, what's certain is that the country's working age population, be it 15-59 or 15-64, or the available labour pool has bulged significantly. That brings us to the question about employment, or rather, unemployment, which can even bring down governments.
As it is, there's a constant chorus of youth unemployment rate, which has become a nightmare for policymakers globally and particularly in neighbouring China and even in India. Let's consider domestic data.
The government releases two types of PLFS reports, an annual estimate of the total labour force, employment and unemployment rate for the period June-July, and quarterly estimates. All reports include two types of survey results -- one with usual status that has a long reference period of one year, and another current weekly status with a reference period of one week. The latter is considered a stricter benchmark capturing the loss in duration of employment.
As per the latest PLFS quarterly dispatch, unemployment rate fell to 6.8% in March 2023, from 8.2% in March 2022, while the labour force increased to 48.5% from 47.3% a year ago. CMIE, on the other hand, estimated the unemployment rate to be 7.8% for the same period, while it pegged the labour force at just 40.5%.
As for annual estimates for June 2021 - July 2022, the total labour force increased from 455 million in 2021 to 477 million in 2022, or an increase of 22 million. However, the number of unemployed remained flat at 35 million during both years.
India's estimated youth unemployment rate in 2022 was at 23.22%, according to the ILO. In fact, for the past decade, the unemployment rate of India's youth -- those aged between 15 and 24 -- has been hovering around the 22% mark. Likewise, the World Bank pegged the youth unemployment rate at 23.2%, mercifully down from 30.9% in 2020.
On the other hand, the PLFS estimated the youth unemployment rate to be 12.4% in July 2022. Of the total 300 million under 15-29 years, the available labour pool stood at 129 million, of which 16 million or so were jobless. But the catch was that the estimates were based on the long period average of one year and there was an estimate based on the weekly average data, which would have given an accurate picture of youth unemployment.
UN projections show that the largest segment of the population is between the 15 and 19 age group at about 120 million. In contrast, China's bulge comes in the 30-34 age group. This large cohort that's entering the job market may not find adequate opportunities if the medium-term potential is 7-8%. It begs the question if India's economic growth ambitions are in sync with its demographic transition.
India's labour force is one of the lowest compared to the global estimate of 60%. Other Asian or BRICS countries fare better with Indonesia's labour pool at 67%, followed by South Korea at 63% and Brazil at 64%.
One of the reasons holding back India's total workforce is the low female labour force participation rate, which the ILO estimates at 24% for 2022. India's own PLFS pegged it at 32.5% for 2022, which officials believe is a 'gross underestimate'. In fact, the Economic Survey 2023 elaborated on the various issues plaguing the female labour force estimate, foremost being the exclusion of productive work such as cattle rearing, poultry farming, etc, effectively pushing several women outside of the working pool. If the anomaly gets corrected, the Economy Survey concluded that the female labour force participation rate would increase to a respectable 46.2%.
Meanwhile, recent data compiled by economist Surjit Bhalla and others using PLFS estimates found that there was an increase of 58 million jobs between calendar year 2019 and 2022 -- the highest pace of job creation in Indian history over a minimum of three years. Within this, jobs for women increased by 28 million or by 25% over the 2019 level, while for men, they increased by 30 million or at only one-third the pace of female jobs -- 8.4%.
That said, going by the official unemployment rate of 4.1% (long period average) and 6.6% (weekly average) in July 2022 implies that the number of jobless Indians stood anywhere between 19 million and 31 million. As more number of people join the workforce, the Indian economy may have to grow more than the projected 6-6.5% per annum to ensure adequate job creation.