May 12, 2017
Only 60% of those seeking work are able to get it throughout the year. Source: Jorge Royan/Wikimedia Commons

Unemployment, irregular jobs and low salaries continue to hurt India while it continues to embrace labour reforms

PRIME MINISTER Narendra Modi pitched for greater use of technology through an unusual equation ‘IT+IT= IT’ which had Internet in splits and Twitterartis trending #pinksliprevolution to underscore the impending layoffs in India’s famed IT sector. But the country’s unemployment saga lies far beyond the glass towers and high figure pay cheques. Around 77 per cent families have no regular wage earner and more than 67 per cent have income less than Rs 10,000 a month. Add to this the consistent march towards labour reforms which make it easier for industries to sack workers. Not even the courtesy of a ‘pink slip’ for them.

Bandaru Dattatreya, the Minister of State (Independent Charge) for Labour and Employment, had said in his reply in the Lok Sabha on February 6, 2017, that the unemployment rate has risen marginally from 3.4 per cent in 2013-14 to 3.7 per cent in 2015-16. However, the data is based on Usual Principal Subsidiary Status (UPSS) approach that requires only 30 days of work in a year to call the person employed. Many of the persons who are reported as ‘ employed’ or ‘workers’ in official publications do not get work for the entire duration or they get the work only for a small fraction of the time they are available. 

If instead Usual Principal Status (UPS) approach is taken (183 days of work), the unemployment rises to 5 per cent, says the Fifth Annual Employment Unemployment Survey 2015-16 conducted by the Labour Bureau which also said that only 60.6 per cent workers were able to get work throughout the year.

Female unemployment rate was 8.7 per cent as compared to 4 per cent among males. This variance gets starker in urban areas where female unemployment rises to 12.1 per cent. The reason might be women’s contribution to farm labour and government job schemes like MGNREGA. The North Eastern and Southern states display high female participation as compared to Northern states. Chandigarh had the lowest female labour participation rate at 8.2 per cent followed by J&K (10.5 per cent), Punjab (11.1 per cent), Uttar Pradesh (11.2 per cent) and Delhi (12.2 per cent). Chhattisgarh has the highest female participation rate of 54.3 per cent followed by Mizoram (54 per cent), Nagaland (53.6 per cent), Meghalaya (46.7 per cent) and Andhra Pradesh (46.6 per cent).

More than the availability of jobs, it’s the kind of jobs people have to live with. Of the total employed, 46.6 per cent were self employed, 32.8 per cent were casual labour and the rest 3.7 per cent were contract workers and thus a majority (71.2 per cent) of workers were not eligible for social security benefits. Only 17 per cent persons were regular wage/salaried persons. 

Around 66.4 per cent of the contract workers and 84.3 per cent of the casual workers had monthly earnings of up to Rs 7,500. Most (67.5 per cent) of the self employed workers also had average monthly earnings up to Rs 7,500. This is not a surprise since average monthly income of farmers, who fall in the category of self-employed, was Rs 6,426 in 2012-13 NSSO Sample Survey. Similarly, 57.2 per cent i.e. more than half of the regular wage/salaried workers had monthly average earnings up to Rs 10,000.  

Around 5.1 per cent of the households did not have even a single earner while 48.4 per cent had one employed person followed by 30.6 per cent households with two earners.  

Of the total families, more than 67 per cent had average monthly income less than Rs 10,000. Rural sector had greater proportion of such households at 77 per cent as compared to 45 per cent urban households. Madhya Pradesh recorded the highest proportion (35.8 per cent) of households with average monthly earnings not exceeding Rs 5,000 followed by West Bengal (34.5 per cent), Uttar Pradesh (30.1 per cent) and Odisha (29.8 per cent). 


This apart, many are working on jobs which do not allow them to fully utilise their abilities or from which they earn very low incomes. All this constitutes under-employment which remains a worrying aspect of the job scenario in the country. Around 58 per cent of unemployed graduates and 62.4 per cent of unemployed post graduates cited non-availability of jobs matching with education/skill and experience as the main reason for unemployment followed by non availability of adequate remuneration cited by 22.8 per cent of graduates and 21.5 per cent of post graduates.

Conversely, as per the National Skill Development Mission Document, only 2.3 per cent of the workforce in India has undergone formal skill training as compared to 68 per cent in the UK, 75 per cent in Germany, 52 per cent in USA, 80 per cent in Japan and 96 per cent in South Korea.

At the All India level, 64.9 per cent of the regular wage/ salaried workers, 67.8 per cent of the contract workers and 95.3 per cent of the casual workers do not have a written job contract. Only 27 per cent of the regular wage/salaried workers and 11.5 per cent of the contract workers had written job.

When it comes to getting a job, informal referral method remains one of the most popular. Only 4.3 per cent unemployed persons tried to get a job through government employment exchanges. Most (33.5 per cent) used more than two methods to seek work, followed by through friends and relatives (24.1 per cent), application made in response to advertisement (23.7 per cent).

Only around 24 per cent households benefitted from employment generating schemes like MGNREGA, PMEGP, SGSY and SJSRY etc. Only three North Eastern States, namely Tripura, Manipur and Mizoram had more than 70 per cent of the households benefiting from MGNREGA.

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