Formal job creation takes a hit, but unemployment comes down, shows data

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Data by Employee Provident Fund Organisation (EPFO) and recently, under the PLFS (Periodic Labour Force Survey) gave contrasting insights into India’s current employment scenario. According to EPFO payroll data, around 13.19 lakh new formal jobs were created in April 23, which marginally fell to 12.61 lakh jobs in May. The rate of formal job creation gathered some pace in June, when around 15.77 lakh jobs were generated, followed by July, where 18.74 lakh new jobs came to being. This brings the total job created between this period to 60.31 lakhs

However, there was a 14.5% Y-o-Y dip, given that around 70 lakh jobs were generated during the same period in 2022. Overall, there has been a slight jump in the total number of jobs created in 2021-22, which stood at around 1.22 crores, to 1.38 crores in 2022-23. 

It is noteworthy that EPFO payroll data only indicates the number of workers inducted into the formal workforce, and is not an accurate sign of overall employment. Hence, these numbers can differ from overarching data that signifies employment trends in the country. 

According to data released by the PLFS by the Ministry of Statistics and Programme Implementation (MoSPI) for the period April-June 2023, labor force participation rate (LFPR) registered a steady uptick in both urban and rural areas. While it rose from 50.7% in 2017-18 to 60.8% in 2022-23, urban areas saw their LFPR jump from 47.6% in 2017-18 to 50.4% in 2022-23. 

There were some heartening trends noted in terms of increasing women participation in India’s workforce. While LFPR for men rose from 75.8% in 2017-18 to 78.5% in 2022-23, LFPR for women registered a steep rise, going up from 23.3% in 2017-18 to about 37% in 2022-23. 

When it comes to unemployment rates, the overall figures instill some confidence as well. In rural India, unemployment rate went down to 2.4% in 2022-23, as opposed to 5.3% in 2017-18. As for urban areas, the unemployment rates slipped from 6.1% in 2017-18 to 3.3% in 2022-23. 

In rural areas, UR decreased from 5.3% in 2017-18 to 2.4% in 2022-23 while for urban areas it decreased from 7.7% to 5.4%. UR for male in India decreased from 6.1% in 2017-18 to 3.3% in 2022-23 and corresponding decrease in UR for females was from 5.6% to 2.9%. Overall, unemployment rates between April-June 2023 stood at 6.6%, which was markedly lower than the unemployment rates registered pre-pandemic.