The Employment Landscape in India Today

India has one of the largest workforces in the world, with over 520 million people. However, the employment situation is complex. While recent years have seen job creation, serious challenges remain when it comes to the quality and availability of jobs.

Unemployment Rates

India's overall unemployment rate has hovered between 7-8% in recent years, according to data from the Centre for Monitoring Indian Economy (CMIE). This number only captures the proportion of people actively looking for work. Experts estimate a higher rate when including those who have given up on job searches. The numbers differ significantly between rural and urban areas as well.

The unemployment crisis is most acute for India's educated youth and in cities. The jobless rate for graduates and those with higher levels of education has averaged 12-15% since 2018 according to some estimates. Meanwhile, open unemployment in urban areas could be as high as 9.4% based on recent National Sample Survey Office (NSSO) data.

Employment Growth Trends

While headline unemployment figures appear troubling, experts note that net job creation has happened in recent years. A surge occurred between 2017-2018 amounting to over 10 million new non-farm jobs according to payroll data. Growth continued but slowed significantly during 2020 and 2021 as the economy took COVID-19 hits.

Most new employment seems concentrated in low wage daily wage work or self-employment though. In contrast, salaried jobs only grew from 20.2% to 21.6% of total employment from 2011 to 2019 based on Periodic Labour Force Survey (PLFS) data. Experts say poor quality work accounts for much “employment” today.

Key Factors and Policy Solutions

Analysts cite impediments like regulatory hurdles to business investments, constraints to manufacturing competitiveness, gross underinvestment in human capital, and extremely modest spending on social security programs relative to needs.

As India looks to capitalize on its demographic dividend, recommendations involve subsidizing hiring in key sectors, directing credit to small firms capable of job creation, increased public investments into skills training programs, and expanding basic unemployment benefits to alleviate distress among jobseekers.

The road to achieving full and suitable employment for India's expanding workforce remains long. But with the right set of policy priorities focused explicitly on job creation, experts believe impacts could be substantial.