India’s suboptimal use of its labour power

Syllabus: GS- III, Subject: Economy, Topic: Unemployment and issues, Issue: Periodic Labour Force Survey (PLFS)

Periodic Labour Force Survey (PLFS):

  • a survey conducted by the Ministry of Statistics and Programme Implementation (MoSPI) to collect data on employment and unemployment.

Key trends in PLFS and Important Data Points:

  • Increase in Labour Force Participation Rate– from around 52% in 2017-18 to around 58% in 2021-22, (Largely driven by rural women.)
  • Decrease in unemployment rate– decreased from 6.2% to 4.2% during the same period, with higher youth unemployment declining from 12% to 8.5%.
  • Self-employment leading to rise in LFPR and drop in unemployment, particularly unpaid family workers, increasing from 26% to 31.4%.
  • Worsening job quality– Unpaid family labor and own-account workers, constituting nearly 35% of the employed, reflects worsening job quality.
  • Stagnant earning– For Wage and salaried workers as well as the self-employed, while casual workers experienced a 20% increase in daily earnings.

Key concerns with this:

  • India’s demographic dividend is expected to peak in less than 20 years and exhaust in 30 to 35 years.
  • Engaging a majority in low-quality work during this period hampers optimal utilization of labor capital.
  • This scenario may lead to a potential vicious cycle of economic slowdown.
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