Ministry of Labour and Employment disputes Citigroup's pessimistic job growth report

The Ministry of Labour and Employment has strongly rebutted a recent research report by Citigroup, which forecasts that India will struggle to create sufficient employment opportunities even with a 7% growth rate. The Ministry emphasized that the report fails to account for comprehensive and positive employment data from official sources such as the Periodic Labour Force Survey (PLFS) and the Reserve Bank of India's KLEMS data.

According to data from the PLFS and RBI's KLEMS, India has generated over 80 million employment opportunities from 2017-18 to 2021-22, averaging more than 20 million jobs per year. This significant employment creation contradicts Citigroup's assertion and demonstrates the effectiveness of various government initiatives aimed at boosting employment across sectors.

The Annual PLFS report indicates improving trends in several key labour market indicators for individuals aged 15 years and above from 2017-18 to 2022-23. The Worker Population Ratio (WPR) increased from 46.8% in 2017-18 to 56% in 2022-23, and the Labour Force Participation Rate (LFPR) rose from 49.8% to 57.9% during the same period. Furthermore, the Unemployment Rate declined from 6.0% in 2017-18 to a low of 3.2% in 2022-23.

The Employees' Provident Fund Organisation (EPFO) data shows a significant increase in formal sector employment, with over 1.3 crore subscribers joining EPFO in 2023-24, compared to 61.12 lakh in 2018-19. Over the last six and a half years, more than 6.2 crore net subscribers have joined EPFO, indicating a substantial growth in formal employment.

The National Pension System (NPS) data reveals that more than 7.75 lakh new subscribers joined NPS under the Central and State governments in 2023-24, a 30% increase from 2022-23. Additionally, the Indian Staffing Federation (ISF) reports employing about 5.4 million formal contract workers, with nearly 30% demand remaining unfulfilled across sectors like manufacturing, retail, and banking due to talent shortages and labour mobility.

India's future employment market prospects are promising, with significant growth in Global Capability Centers (GCCs) and the gig economy. The NITI Aayog report on the gig economy projects that platform workers will increase to 23.5 million by 2029-30, representing 6.7% of the non-agricultural workforce and 4.1% of the total livelihood in India.

The Ministry highlighted the reliability and comprehensiveness of official data sources, cautioning against the selective use of private data sources, which can lead to misleading conclusions. Official statistics, such as those from PLFS, RBI, and EPFO, are aligned with national and international standards and provide a more accurate picture of India's employment scenario.

The Ministry of Labour and Employment reiterated its commitment to creating a robust and inclusive job market. The evidence from official data sources indicates substantial progress, with consistent improvements in labour market indicators, increased formal sector employment, and emerging opportunities in various sectors. The government remains focused on sustaining these positive trends and addressing the challenges highlighted in the Citigroup report.