ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Stagnant Employment Growth

Last Three Years May Have Been the Worst

Employment growth in India slowed down drastically during the period 2012 to 2016, after a marginal improvement between March 2010 and March 2012, according to the latest available employment data collected by the Labour Bureau. There was an absolute decline in employment during the period 2013–14 to 2015–16, perhaps happening for the first time in independent India. The construction, manufacturing and information technology/business process outsourcing sectors fared the worst over this period.

The author acknowledges research support by Pooja Padmanaban.

India’s employment growth, as recorded by the employment and unemployment survey (EUS) conducted by the National Sample Survey Office (NSSO), had been slowing down since 2004–05. From about 2% per annum between 1999–2000 and 2004–05, employment growth declined to around 0.7% per annum between 2004–05 and 2009–10, and further slowed down to around 0.4% per annum between 2009–10 and 2011–12 (Mehrotra et al 2014; Shaw 2013). However, since the last thick sample round of the EUS in 2011–12, there has been scant information on employment growth, but much speculation around it. In this scenario, the three available data sources, the Labour Bureau’s Employment–Unemployment Surveys (LB–EUS), the Quarterly Quick Employment Surveys (QES), and the revised QES that give information for more recent periods, will help us decipher labour market trends after 2011–12.1

The Labour Bureau had been conducting nationally representative annual EUS of households, the latest round being for 2015–16 with a sample size of more than a lakh households, which is greater than the sample size of NSSO’s EUS.2 The QES, usually conducted quarterly in a year, provides employment figures based on establishments with more than 10 employees, largely in line with the definition of the organised sector in India. The QES had covered only seven sectors of manufacturing enterprises and information technology/business process outsourcing (IT/BPO) with the limited sample size of about 2,000 firms till end of 2015. Since 2016, in the revised QES, the coverage has widened to include all important segments of the services sector as well3 and the sample size has increased to more than 10,000 enterprises. It may be noted that using these two sources, we get evidence from both the supply-side (LB–EUS household surveys) and demand-side (QES enterprise surveys). Based on these surveys, a brief overview of the Indian labour market is presented.

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Updated On : 27th Sep, 2017
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