02-December-2023-Editorial

UNEMPLOYMENT RATE IN URBAN AREAS HAS COME DOWN

The Periodic Labour Force Survey (PLFS), conducted by the National Sample Survey Office (NSSO), provides crucial insights into India’s urban unemployment scenario. The recently released data for July-September 2023 offers key highlights, depicting trends in unemployment rates, worker-population ratios, and labour force participation rates. Understanding the PLFS and its related terms is essential for comprehending the employment landscape in urban areas.

Major Highlights of the Recent PLFS:

Urban Unemployment Rate:

• Declined from 7.2% (July–September 2022) to 6.6% (July–September 2023).
• Male unemployment decreased from 6.6% to 6%, while female unemployment showed a positive trend, dropping from 9.4% to 8.6%.

Worker-Population Ratio:

• Increased from 44.5% (July-September 2022) to 46% (July-September 2023) for individuals aged 15 years and above.
• Male ratio rose from 68.6% to 69.4%, and female ratio increased from 19.7% to 21.9%.

Labour Force Participation Rate (LFPR):

• Rose from 47.9% (July-September 2022) to 49.3% (July–September 2023).
• Male LFPR marginally increased from 73.4% to 73.8%, while female LFPR exhibited a substantial rise from 21.7% to 24.0%.

About Periodic Labour Force Survey (PLFS):

• Launched by NSSO in April 2017 to provide more frequent labour force data.
• Defines unemployment rate as the percentage of unemployed persons among those in the labour force.
• Aims to estimate key employment and unemployment indicators in urban areas at three-month intervals.

Labour Force Participation Rate (LFPR):

Percentage of people aged 15 and above employed or actively seeking work.

Worker Population Ratio (WPR):

Measures the percentage of employed individuals within the total population.

Unemployment Rate (UR):

Indicates the percentage of unemployed persons among those in the labour force.

Activity Status:

• PS (Principal Activity Status): Primary activity engaged in for a substantial period.
• SS (Subsidiary Economic Activity Status): Additional economic activities performed apart from the usual primary activity.
• CWS (Current Weekly Status): Reflects a person’s activities during the immediate past 7 days.

Major Issues Related to Unemployment in Urban Areas:

Structural Unemployment: Disparity between workforce skills and industry demands. Education system misalignment with job market needs.

Informal Sector Dominance: Significant urban workforce in informal sector with low pay and job insecurity. Seasonal fluctuations leading to inconsistent employment.

Demographic Challenges: Rapid urbanization and migration straining job market. Oversupply of labour due to rural-to-urban migration.

Credential Inflation: Overemphasis on qualifications leading to overqualified individuals. Results in underemployment or unemployment.

Government’s Initiatives Related to Employment:

• Support for Marginalized Individuals for Livelihood and Enterprise (SMILE).
• PM-DAKSH (Pradhan Mantri Dakshta Aur Kushalta Sampann Hitgrahi).
• Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).
• Pradhan Mantri Kaushal Vikas Yojana (PMKVY).
• Start Up India Scheme.
• Rozgar Mela.
• Indira Gandhi Urban Employment Guarantee Scheme- Rajasthan.

Way Forward:

Reformative Education: Align education with market demands. Update curricula for relevant skills and emphasize vocational training.

Startup Ecosystem Support: Provide financial incentives and reduce bureaucratic hurdles for startups. Offer mentorship programs to encourage entrepreneurship.

Pro-Employment Policies: Formulate policies promoting job creation. Invest in infrastructure and provide fiscal incentives for employment-generating businesses.

Promoting Creative Economy: Invest in cultural industries and creative sectors. Support artisans, performers, and craftsmen for employment through cultural entrepreneurship.

Green Spaces and Urban Agriculture: Promote urban agriculture and green spaces. Create employment in farming, gardening, and eco-friendly activities.

Understanding the PLFS data and addressing urban unemployment issues through strategic policies and initiatives is crucial for India’s economic growth and inclusive development.