Period Labour Force Survey: Important Facts

The Periodic Labour Force Survey (PLFS) for July 2023 to June 2024, released by the Labour Bureau on Monday, September 23, 2024, showed no significant change in the unemployment rate. There was a slight increase in the proportion of workers in agriculture, while the manufacturing sector showed no job growth compared to previous years. However, there was an improvement in women’s workforce participation. The government had previously faced criticism for rising unemployment and the declining number of women in the workforce.

PLFS Report

The Periodic Labour Force Survey (PLFS) is conducted by the National Statistical Office (NSO) under the Ministry of Statistics and Programme Implementation (MoSPI) to assess employment and unemployment in India. It was developed to overcome the limitations of earlier labour force surveys by the National Sample Survey Office (NSSO).

Two Primary Objectives of PLFS:

• First Objective: To track the dynamics of labour force participation and employment status at short intervals (every three months) in urban areas using the Current Weekly Status (CWS) approach.
• Second Objective: To provide labour force estimates for both rural and urban areas using both the Usual Status and CWS measures.
• Innovations in Sampling Design and Data Collection: The PLFS introduced changes in sampling design and the structure of inquiry compared to previous quinquennial surveys by the NSSO. It also included new data points, such as the number of hours worked, which were not part of earlier NSSO rounds.

Key Highlights of the PLFS report 2023-24

• Stagnant Unemployment Rate: The unemployment rate for 2023-24 remained steady at 3.2%, the same as in 2022-23. This marks the first time since the launch of the PLFS in 2017-18 that the unemployment rate has not shown a year-on-year decline.
• Labour Force Participation Rate (LFPR): There was a notable increase in the LFPR, rising to 60.1% in 2023-24 from 57.9% in 2022-23 at the national level. The rural LFPR increased to 63.7%, while the urban LFPR rose to 52%. This suggests more people are seeking work in rural areas, likely due to reverse migration or limited urban job opportunities during and after the pandemic. LFPR reflects the percentage of people either working or looking for work in the population.
• Increasing Worker Population Ratio (WPR): The WPR stood at 58.2% in 2023-24, with male WPR at 76.3% and female WPR at 40.3%. WPR represents the percentage of employed individuals in the population.
• Marginal Improvement in Job Quality: Job quality saw a slight improvement, with the share of salaried or regular wage workers increasing by 0.8 percentage points to 21.7%.
• Urban and Rural Divergence: In rural areas, the unemployment rate saw a slight uptick, rising to 2.5% in 2023-24 from 2.4% in 2022-23. In contrast, the urban unemployment rate improved, dropping to 5.1% from 5.4%.
• Gender Disparity: The unemployment rate for women increased to 3.2%, up from 2.9% in 2022-23, while for men, it slightly decreased to 3.2% from 3.3%.
• Increase in Self-Employment and Unpaid Work: The share of people engaged in self-employment, including unpaid household work and small businesses, grew to 58.4% from 57.3% in 2022-23. Self-employment encompasses both entrepreneurial ventures and informal work, making it a mixed indicator of job quality.
• Challenges in Creating Decent Jobs: The economy’s inability to generate sufficient formal jobs has led more people into self-employment, often in the informal sector or unpaid family roles. Wage employment remains significantly lower than in the pre-pandemic period, underscoring the challenges in creating formal, secure employment.
  

Where the problem lies?

• Increasing Informalization in Employment: The rise in employment in agriculture and construction is linked to a growing trend of informalization. These sectors are generally not protected by labor laws, leaving workers without access to social security or job security.
• Technological Advancements: The introduction of AI and IoT threatens job prospects even for skilled workers, complicating the employment scenario further. Concerns are growing that automation and digitization will reduce labor demand. For instance, layoffs in IT firms demonstrate how automation can shrink job opportunities, even for skilled workers.
• Growing Number of Jobseekers: The increase in educated job seekers, especially those with graduate degrees, raises concerns about the availability of suitable jobs, as the demand for such employment appears to be decreasing.
• Policy Missteps: Policies like the 2016 demonetization and the poorly implemented Goods and Services Tax (GST) in 2017 have negatively impacted MSMEs, further reducing job creation in a sector that employs the majority of India’s workforce.
• Stagnant Service Sector: While sectors such as transport, storage, communication, and financial services have maintained steady output, their employment share has dropped from 6% to 5%, with financial services falling below 1%.
• Skill Mismatch: Despite the government’s focus on skilling, the share of workers in skilled jobs decreased from 18% in 2018-19 to 14% in 2022-23. This decline, along with widening inequality and a decreasing worker-to-population ratio, highlights the growing challenges of unemployment.

What  can be done?

• Strengthening MSMEs: Micro, Small, and Medium Enterprises (MSMEs) require targeted financial support, tax incentives, and a simplified regulatory framework to aid their recovery and enhance their capacity to create jobs.
• Human-Centric Tech Adaptation: Priority should be given to fostering innovation in sectors with high labor absorption potential, such as renewable energy, healthcare, and sustainable manufacturing—areas less likely to be fully automated.
• Industry-Aligned Skill Development: The government’s skilling programs should be tailored to meet current and future industry demands, incorporating training in emerging fields like green jobs, AI ethics, cybersecurity, and data analytics.
• High-Potential Service Sectors: Focus should also be placed on promoting the growth of modern service industries, such as e-commerce, logistics, and online education, which have the potential to create employment opportunities across various skill levels.

Generating employment is very crucial for sound economy. Therefore proper measures should be taken to improve employment status in the country.

The End of the Blog: Period Labour Force Survey: Important Facts