State of employment in India

According to the latest data from the Centre for Monitoring Indian Economy (CMIE), India’s labor force participation rate (LFPR) has fallen to 40% from 47% in 2016.

What is the labor force?

According to the Centre for Monitoring Indian Economy (CMIE), the labor force consists of persons who are of age 15 years or older, and belong to either of the following two categories:

  1. Are employed
  2. Are unemployed and willing to work and are actively looking for a job.

What is Labour Force Participation Rate (LFPR)?

  • LFPR is defined as the percentage of persons in the labor force in the population.
  • LFPR includes those who are employed and those who are unemployed.

What is Worker Population Ratio (WPR)?

WPR is defined as the percentage of employed persons in the population.

What is Unemployment Rate (UR)?

UR is defined as the percentage of persons unemployed among the persons in the labor force.

Which state has the lowest unemployment rate and why?

Chhattisgarh has the country’s lowest unemployment rate. Schemes and programs like Godhan Nyay Yojana, the constitution of the Tea-Coffee Board, etc. seem to have helped bring down Chhattisgarh’s unemployment rate to 0.6% by March 2022.

What is the LFPR at the global level?

The world over, LFPR is around 60%. In India, it has been sliding over the last 10 years and has shrunk from 47% in 2016 to just 40% as of December 2021.

What does falling LFPR indicate?

Falling LFPR indicates that people of the working-age stopped demanding work.

Why is India’s LFPR so low?

The main reason for India’s LFPR being low is the abysmally low level of female LFPR.

What is India’s female and male LFPR?

According to CMIE data, as of December 2021, while the male LFPR was 67.4%, the female LFPR was 9.4%. It means, less than one in 10 working-age women in India are demanding work.

What is female LFPR at the global level?

According to World Bank data, India’s female labor force participation rate (LFPR) is around 25% while the global average is 47%.

Why female LFPR is low?

  • Lack of adequate job opportunities for women.
  • Lack of conducive working conditions — such as law and order, efficient public transportation, violence against women, societal norms, etc.
  • Incorrect measuring of women’s contribution to the economy. Many women in India are exclusively involved within their own homes (caring for their family), which is not measured.

What are the problems regarding the employment situation of the country?

  1. The rapid introduction of electric vehicles will cause a decline in employment in the automobile sector. Increasing pollution will force India to shut down thermal power plants and coal mines leading to mass unemployment.
  2. Agriculture labor is 144 million strong and predominantly low-paid. The government must enable a smooth transition of these workers into more productive and better-paying jobs.
  3. The disparity amongst states in India is worrisome with Bihar having a meager per capita income of Rs 50,733 as against the Rs 5.2 lakh of Sikkim.

What is the Centre for Monitoring Indian Economy (CMIE)?

It is a leading business information company. It was established in 1976, primarily as an independent think tank. It produces economic and business databases.




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