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Indian labour markets show decent recovery in September, best in 3 years

In September, the labour force participation rate increased to 43.2 per cent versus 43 per cent in the previous month. More importantly, the employment rate climbed to 40.1 per cent from 39.5 per cent during this period

twitter-logo BusinessToday.In   New Delhi     Last Updated: October 8, 2019  | 15:16 IST
Indian labour markets show decent recovery in September, best in three years
Overall, the labour market metrics improved all across India in September 2019

The data on India's labour participation shows that in September, the estimated number of people employed shot up to nearly 41 crore, the highest in almost three years. This was nearly 0.7 crore more than the 40.3 crore that were employed in August. The labour participation in India stood at 40.3 crore in September 2018.

According to Centre for Monitoring Indian Economy (CMIE) report, September was arguably the best month for the labour markets in India in almost three years. The month saw a pick-up in the labour participation as well as increase in employment across rural and urban regions, albeit very unevenly.

"Month-on-month estimates can be volatile and so, the 0.7 crore increase could be partly statistical noise. Yet, it is large enough to believe that there was a substantial pick-up in employment during September 2019," CMIE said in its latest report on labour markets in India.

As per CMIE data, the labour force rose by 1 crore on the year-on-year basis to 44.1 crore in September 2019. As of August 2019, the labour force stood at 43.9 crore. "These are big increases, bigger than the projected increase in the working-age population during the same period," the report said.

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In September, the labour force participation rate increased to 43.2 per cent versus 43 per cent in the previous month. More importantly, the employment rate climbed to 40.1 per cent from 39.5 per cent during this period.

In a similar trend, September's unemployment rate declined to 7.2 per cent from a high of 8.2 per cent in August. However, the unemployment rate was still higher than the 6.5 per cent level reported in the year-ago period.

Overall, the labour market metrics improved all across India, but a predominant increase in employment came from rural India. Employment in rural India rose sharply by 0.6 crore in September 2019 -- from 27.6 crore in August to 28.2 crore.

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According to the report, rise in rural employment can be seasonal and can be attributed to the monsoon effect. The delayed monsoon might have increased agricultural activities sharply during September and this showed up as increased employment in rural India, it added.

In the rural India, labour participation increased from 44.1 per cent in August to 44.3 per cent in September. The labour force crossed 30 crore in September 2019. "Of these, 28.2 crore were employed, 1.8 crore were unemployed and another 0.7 crore were willing to work but were not actively looking for jobs and so were not counted as unemployed."

Meanwhile, Urban India witnessed very modest increase. "Labour force increased by 0.04 crore, employment increased by 0.05 crore and the unemployed declined by 0.01 crore in September 2019 compared to the estimates of August 2019," said the report.

"The small improvements seen in urban labour statistics in reality only mean that in September 2019, urban labour market conditions did not deteriorate any further. The unemployment rate is still high at 9.6 per cent and the employment rate is still low at a mere 37 per cent," the report said.

As of September 2019, over 1.36 crore people were unemployed in urban India, of which 35 per cent were graduates or post-graduates. The count of urban graduates who are unemployed is rising steadily but, the count of urban graduates who are employed is declining gradually, the report noted.

Edited by Chitranjan Kumar

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