Fall in labor participation rate worsened by pandemic remains a cause for concern
(Photo by Chandradeep Kumar)
According to the Center for Monitoring India Economy (CMIE), the job market is shrinking and millions of people are leaving India entirely. Between 2017 and 2022, the overall labor participation rate fell from 46 percent to 40 percent. CMIE says that more than half of the 90 crore Indians of legal working age now do not have/want to have a job.
According to a 2020 report by McKinsey Global Institute, India needs to create at least 90 million new non-farm jobs by 2030. This would require an annual GDP growth of at least 8-8.5 per cent, the report said. Although the trend of reduction in labor participation predates the Covid virus, the pandemic has made the situation worse. The government has from time to time excluded its own pre-Covid pandemic data from labor force surveys, but is in fact in a state of denial.
