India Adds 46.7 Million Jobs in Fiscal 2023-24 (GS Paper 3, Economy)
Introduction
- India experienced a significant boost in employment in the fiscal year 2023-24, creating 46.7 million new jobs and bringing the total number of jobs across the country to 643.3 million.
- This remarkable growth rate of 6% is detailed in the Reserve Bank of India’s (RBI) newly released provisional output report, highlighting a substantial improvement from the 3.2% growth rate in the previous fiscal year.
RBI’s Provisional Productivity Report: A New Approach
- The RBI's provisional productivity report for FY24 marks a significant shift from its traditional reporting methods.
- For the first time, the RBI has utilized current data to measure economic output, offering a real-time perspective on India's economic and job market changes.
- This innovative approach provides a more accurate reflection of the country's economic health and employment trends.
Employment Growth Amidst Rising Unemployment
- Despite the impressive job creation figures, rising unemployment remains a critical issue.
- The Center for Monitoring the Indian Economy (CMIE) reported an increase in the jobless rate from 7% to 9.2% in June 2024, the highest in eight months.
- This paradox between job creation and rising unemployment has fueled debates about “jobless growth,” a prominent topic during the recent parliamentary elections.
GDP Growth and Employment Projections
- India’s GDP grew by an exceptional 8.2% in FY24, surpassing expectations.
- The RBI forecasts a GDP growth rate of 7.2% for FY25, aligning with the current strong growth trajectory.
- However, Citibank research indicates that even a 7% GDP growth might generate only 8 to 9 million jobs, potentially falling short of the workforce's needs over the next decade.
- This underscores the complex relationship between GDP growth and job creation, suggesting that economic growth alone may not suffice to meet employment demands.
Methodological Insights: Data Behind the Estimates
- The RBI’s employment estimates are derived from data provided by the Ministry of Labour and the government’s National Accounts.
- These estimates extrapolate output and employment levels across 27 industries, encompassing agriculture, manufacturing, and services.
- This comprehensive methodology ensures a detailed and extensive view of job conditions across various economic sectors.
Conclusion
- The creation of 46.7 million new jobs in fiscal 2023-24 is a significant milestone for India, reflecting robust economic growth.
- However, the concurrent rise in unemployment highlights the need for a nuanced approach to employment policies and economic planning.
- As India continues to grow, understanding the intricate dynamics between GDP growth and job creation will be essential to ensure sustainable and inclusive economic development.
