India’s formal job creation is experiencing a notable slowdown, as indicated by recent data from the Employees’ Provident Fund Organisation (EPFO). The statistics for the first half of the fiscal year 2023-24 reveal a concerning 10.1% decline in new subscribers. This downturn not only impacts the overall employment landscape but also has specific implications for the 18-28 age group and women, raising questions about the quality and inclusivity of job opportunities in the country.
Young Workforce Hit
A significant trend highlighted by the data is the 9.54% reduction in subscribers aged 18-28, a demographic that traditionally represents the entry-level workforce. This decline suggests challenges in sustaining a robust labour market, sparking concerns about the overall health of employment opportunities for young individuals. As the youth face hurdles in accessing formal jobs, there’s a potential shift towards self-employment and other informal modes of engagement.
Technology Sector Struggles
The formal workforce, especially in the technology and knowledge sector, is grappling with challenges such as declining revenues and muted demand. The repercussions are evident in the sector’s efforts to rationalise its workforce, affecting hiring practices. Some candidates are even delaying their entry into firms despite receiving placement offers. This highlights the need for sector-specific interventions to revive and sustain formal job creation.
Gender Disparities
The data reveals an 11.1% decrease in the number of women subscribers, emphasising the difficulties women face in accessing formal employment. The requirement for in-office work in certain firms further exacerbates gender disparities. Bridging the gender gap in formal job opportunities is crucial for achieving a more equitable and diverse workforce, necessitating targeted initiatives and policy interventions.
Recovery Challenges
Labour economist Santosh Mehrotra underscores the incomplete recovery of labour markets. The slow pace of formal job creation is failing to keep up with the growing labour force, leading to increased self-employment and engagement in agriculture, particularly among the youth and women. Addressing this challenge requires a comprehensive strategy that focuses on skill development, sectoral growth, and creating an enabling environment for businesses to thrive.
Contrasting Data
The EPFO data presents a contrast to the Periodic Labour Force Survey (PLFS) by the National Statistical Office (NSO), which reports a six-year low in the unemployment rate. However, the PLFS also highlights an increase in the share of people engaged in agriculture. This discrepancy suggests that while more people are entering the labour market, the economy struggles to generate sufficient quality jobs. Understanding these nuances is crucial for formulating effective policies that address both the quantity and quality of employment opportunities.
Bottom Line
The 10% decline in fresh formal job creation, as revealed by EPFO data, poses significant challenges for India’s workforce. Tackling the issues faced by the young workforce, addressing sector-specific struggles, bridging gender disparities, and ensuring a balanced recovery that aligns with the evolving labour market dynamics are key imperatives. Policymakers, businesses, and other stakeholders must collaborate to create a resilient and inclusive job market that fosters sustainable economic growth.
