Employment in India

Worker population ratio

Worker-population ratio for India, divide the total number of workers in India by the population in
India and multiply it by 100.

Worker Population Ratio is an indicator used for analyzing the employment situation in the country.
This is also useful in knowing the proportion of population that is actively contributing to the
production of goods and services in the economy.

Labour force participation rate

The labour force participation rate is the measure to evaluate working-age population in an
economy. The participation rate refers to the total number of people or individuals who are
currently employed or in search of a job. People who are not looking for a job such as full-time
students, homemakers, individuals above the age of 64 etc. will not be a part of the data set.

Casualisation of workforce

last four decades (1972-2012), people have moved from self employment and regular salaried
employment to casual wage work. Yet self-employment continues to be the major employment
provider. Scholars call the process of moving from self-employment and regular salaried
employment to casual wage work as casualisation of workforce.
Workers in formal and informal sectors
All the public sector establishments and those private sector establishments which employ 10 hired
workers or more are called formal sector establishments and those who work in such
establishments are formal sector workers.

All other enterprises and workers working in those enterprises form the informal sector. Thus,
informal sector includes millions of farmers, agricultural labourers, owners of small enterprises and
people working in those enterprises as also the self-employed who do not have any hired workers.

It also includes all non-farm casual wage labourers who work for more than one employer such as
construction workers and headload workers.

Informalisation of Indian workforce

Unemployment in India

National Sample Survey Organization (NSSO) defines employment and unemployment on the
following activity statuses of an individual:

Working (engaged in an economic activity) i.e. 'Employed'.

Seeking or available for work i.e. 'Unemployed'.

Neither seeking nor available for work.

The first two constitutes labour force and unemployment rate is the percent of the labour force that
is without work.

Unemployment rate = (Unemployed Workers / Total labour force) × 100

Types of Unemployment in India

Disguised Unemployment: It is a phenomenon wherein more people are employed than actually
needed.It is primarily traced in the agricultural and the unorganised sectors of India.

Seasonal Unemployment: It is an unemployment that occurs during certain seasons of the year.

Agricultural labourers in India rarely have work throughout the year.

Structural Unemployment: It is a category of unemployment arising from the mismatch between

the jobs available in the market and the skills of the available workers in the market.

Many people in India do not get job due to lack of requisite skills and due to poor education level, it
becomes difficult to train them.

Cyclical Unemployment: It is result of the business cycle, where unemployment rises during
recessions and declines with economic growth. Cyclical unemployment figures in India are negligible.
It is a phenomenon that is mostly found in capitalist economies.
Technological Unemployment: It is loss of jobs due to changes in technology.

In 2016, World Bank data predicted that the proportion of jobs threatened by automation in India is
69% year-on-year.

Frictional Unemployment: The Frictional Unemployment also called as Search Unemployment,

refers to the time lag between the jobs when an individual is searching for a new job or is switching
between the jobs.

In other words, an employee requires time for searching a new job or shifting from the existing to a
new job, this inevitable time delay causes the frictional unemployment. It is often considered as a
voluntary unemployment because it is not caused due to the shortage of job, but in fact, the workers
themselves quit their jobs in search of better opportunities.

Vulnerable Employment: This means, people working informally, without proper job contracts and
thus sans any legal protection. These persons are deemed ‘unemployed’ since records of their work
are never maintained. It is one of the main types of unemployment in India.

Measurement of Unemployment in India

Currently, unemployment data is collected and disseminated by several departments, agencies,

ministries in India.

The primary agencies for survey and data collection are Central Statistical Office (CSO) and the
National Sample Survey Office (NSSO) of the Ministry of Statistics and Programme Implementation
(MOSPI).

Other agencies include Labour Bureau of the Ministry of Labour and Employment (MoLE) and
Registrar General and Census Commissioner of India under Home ministry. Further, Ministry of
Micro, Small and Medium Enterprises (MSMEs) and the Directorate General of Technical Education
(DGET) also occasionally collect employment data.

National Sample Survey Office (NSSO), an organization under Ministry of Statistics and Programme
Implementation (MoSPI) measures unemployment in India on following approaches:

Usual Status Approach: This approach estimates only those persons as unemployed who had no
gainful work for a major time during the 365 days preceding the date of survey.

Weekly Status Approach: This approach records only those persons as unemployed who did not
have gainful work even for an hour on any day of the week preceding the date of survey.

Daily Status Approach: Under this approach, unemployment status of a person is measured for each
day in a reference week. A person having no gainful work even for 1 hour in a day is described as
unemployed for that day.
EPFO manages

social security funds of workers in the organized/semi-organized sector in India. The pay roll data of
EPFO for 2019-20 as on 20th December 2019 shows a net increase of 55.6 lakhs as EPFO subscriber
compared to 61.12 lakhs in 2018-19 (Figure 7). These estimates are net of the members newly
enrolled, exited and rejoined during the year as per records of the EPFO.
Initiatives to Improve Female Work Participation
10.35 To encourage female participation in the economy, various programmes/ legislative

reforms are in place. A number of protective provisions have been incorporated in various

labour laws for creating congenial work environment for women workers such as child

care centers, time-off for feeding children, enhancement in paid maternity leave from 12
weeks to 26 weeks, provisions for mandatory crèche facility in the establishments having

50 or more employees, permitting women workers in the night shifts with adequate

safety measures, etc. The Equal Remuneration Act, 1976 provides for payment of equal

remuneration to men and women workers for same work or work of similar nature without

any discrimination. Under the provisions of the Minimum Wages Act, 1948, the wages fixed

by the appropriate Government are equally applicable to both male and female workers

without any gender discrimination. In order to enhance the employability of female workers,

the Government is providing training to them through a network of women Industrial Training

Institutes, National Vocational Training Institutes and Regional Vocational Training Institutes.

Initiatives by the government

• National Career Service portal was launched serving as a common platform connecting job-
seekers, employers, skill providers, placement organisations and counsellors.
• Pradhan Mantri Kaushal Vikas Yojana (PMKVY) a skill development scheme to help young
people learn industry-relevant skills.
• MGNREGA has contributed to lowering unemployment in rural areas.
• Start Up India, Stand Up India,
• National Skill Development Mission.

• Prime Minister’s Employment Generation Programme (PMEGP) run by Ministry of

Micro, Small & Medium Enterprises, Mahatma Gandhi National Rural Employment
Guarantee Scheme (MGNREGA), Pt. Deen Dayal Upadhyaya Grameen Kaushalya
Yojana (DDU-GKY) scheme run by Ministry of Rural Development and Deendayal
Antyodaya Yojana- National Urban Livelihoods Mission (DAY-NULM) run by Ministry
of Housing & Urban Affairs.
• Pradhan Mantri Mudra Yojana (PMMY) has been initiated by Government for
facilitating self-employment. Under PMMY collateral free loans upto Rs. 10 lakh, are
extended to small/micro business enterprises and to individuals to enable them to
setup or expand their business activities. Till 25th January, 2019, total 15.59 crore loans
have been sanctioned under the scheme.
• Pradhan Mantri Rojgar Protsahan Yojana has been initiated by the Ministry of Labour
and Employment in the year 2016-17 for incentivizing employers for employment
generation. Under this scheme, Government is paying the entire employer’s
contribution (12% or as admissible) towards the EPS and EPF for all sectors w.e.f.
01.04.2018 to all eligible new employees for the next 3 years from the date of
registration of the new employee. Till 28th January, 2019, benefits have been given to
1.29 lakh establishments covering 1.05 crore beneficiaries.
• Under Skill India Mission, Ministry of Skill Development and Entrepreneurship is
implementing a flagship scheme known as Pradhan Mantri Kaushal Vikas Yojana
(PMKVY) 2016-20 with an objective to provide skilling to one crore people under Short
Term Training (STT), Recognition of Prior Learning (RPL) and Special Project (SP) across
the country for four years i.e. 2016-2020 with an outlay of Rs. 12,000 crore. Under the
scheme, short duration skill development training programme is being imparted to all
prospective candidates including candidates belonging to BPL in the country.