Why is it in the News?

On Monday, a Supreme Court bench headed by Chief Justice of India D Y Chandrachud said, “Participation of women in the workforce is a matter not just of privilege but a constitutional entitlement protected by Article 15 of the Constitution.

Context:

• Recent data indicates that while 45% of India's graduates are women, only approximately 10% of educated women pursue long-term careers.
• However, amidst these challenges, there are instances of women advocating for their rights.
  • For instance, a young mother from Himachal Pradesh recently petitioned the Supreme Court for the right to care for her child, who required her presence.
• Chief Justice of India DY Chandrachud emphasized that women's participation in the workforce is a constitutional entitlement, and denying mothers childcare leave violates this principle.
• The petitioner, an assistant professor at a government college, highlighted that the Himachal Pradesh government had refused her childcare leave, despite her child's medical needs.
• The Supreme Court's intervention underscored that the state, as an employer, must address such concerns and uphold the rights of working mothers.

Protection Under the Constitution and Employer Responsibilities Concerning Women's Employment:

Constitutional Safeguards:

• Article 15 of the Indian Constitution stands as a pillar of gender equality, prohibiting discrimination based on sex and allowing for affirmative action to address historical disparities.
• The recent Supreme Court recognition of Article 15 underscores the constitutional imperative to foster a fair and inclusive society, particularly in matters of women's workforce participation.
• By affirming women's right to work without prejudice, the court reinforces the foundational principles of equality and non-discrimination enshrined in the Constitution.

Employer Responsibility:

• Employers, especially the government as role models, carry a significant duty to cultivate a supportive environment for female employees.
• Beyond mere legal compliance, employers must actively address the unique challenges women face in juggling work and caregiving responsibilities.
• The denial of childcare leave, as highlighted in the recent Supreme Court case, signifies a failure to acknowledge and respect women's rights in the workplace.
• The court's stance emphasizes that employers cannot overlook the specific needs of women employees and underscores the importance of proactive measures such as offering childcare assistance, flexible work arrangements, and gender-sensitive policies.
• By fulfilling these obligations, employers not only advance gender equality but also foster a more productive, inclusive, and supportive work culture.

Obstacles to Women's Participation in the Workforce:

Unbalanced Domestic Responsibilities:

• Women in India shoulder a disproportionate share of unpaid domestic and caregiving duties, including household chores and looking after family members.
• This unequal distribution of responsibilities consumes considerable time and effort, often hindering women's capacity to engage in paid employment outside their homes.

"Marriage" and "Motherhood" Setbacks:

• Women commonly encounter setbacks in their careers due to societal norms regarding marriage and motherhood.
• Marriage can lead to disruptions like relocation or increased household duties, affecting women's career trajectories and earning potential.
• Likewise, motherhood often results in temporary career breaks or reduced work hours to manage childcare, limiting opportunities for professional growth and financial independence.

Inadequate Support Infrastructure:

• The scarcity of affordable childcare options, along with insufficient support services like paid parental leave and flexible work arrangements, adds to the challenges faced by women in balancing work and family commitments.
• The absence of adequate support infrastructure may compel women to prioritize caregiving over employment, particularly when alternative care arrangements are lacking.

Legal Framework for Women’s Participation in the Workforce:

Legislative Advances:

• India has taken significant strides in enacting laws to uphold women's rights and foster gender equality in workplaces.
• These laws encompass provisions for maternity benefits, childcare services, and safeguards against gender discrimination in employment practices.
• Recent legislative changes have broadened maternity leave entitlements and mandated childcare facilities at workplaces, underscoring a commitment to bolstering women's engagement in the workforce.

Gender-Neutral Measures:

• Initiatives to render legal provisions gender-neutral represent a positive stride toward acknowledging caregiving duties as a shared responsibility among parents.
• By extending childcare benefits to all employees, regardless of gender, these reforms aim to challenge traditional gender norms and encourage greater equity in caregiving responsibilities within families.

Challenges in Implementing Legal Frameworks for Women's Workforce Participation:

Underfunded Welfare Schemes:

• Government-led initiatives, such as the National Crèches Scheme, face underfunding and inadequate infrastructure, limiting their ability to provide essential childcare services to marginalized communities.
  • Without sufficient financial resources and institutional support, these schemes struggle to meet the demand for affordable and quality childcare services, particularly in underserved regions.

Lack of Enforcement and Monitoring:

• Effective enforcement mechanisms and regular monitoring of compliance are crucial for ensuring that employers adhere to legal requirements related to women's workforce participation.
  • However, enforcement agencies often face challenges like limited resources, bureaucratic inefficiencies, and a lack of coordination between government departments, hindering their ability to enforce labour laws and address violations promptly.

Coverage Limitations:

• Existing laws often have a limited scope, with certain provisions only applying to formal sector establishments or workplaces with a minimum number of employees.
  • This approach excludes many women working in the informal sector or smaller enterprises, leaving them without access to crucial maternity benefits and childcare support.

Way Forward

Collective Responsibility:

• State: The government plays a key role in setting legal and policy frameworks that promote gender equality.
  • This includes enacting supportive laws, providing incentives for employers to adopt family-friendly policies, and investing in social infrastructure such as childcare facilities and education programs.
• Employers: Companies can significantly impact women's workforce participation through their practices and policies.
  • Employers should adopt inclusive hiring practices, provide equal opportunities for career advancement, offer flexible work arrangements, and implement family-friendly policies like paid parental leave and on-site childcare facilities.
• Communities: Communities play a crucial role in challenging traditional gender norms and stereotypes.
  • Community-based organizations, educational institutions, and grassroots initiatives can raise awareness, provide support for working mothers, and advocate for policy changes that promote gender equality.

Policy Integration:

• Integrating gender considerations into broader policy frameworks is essential for mainstreaming gender equality across all sectors of society.
• Key strategies include implementing gender-responsive budgeting, conducting gender impact assessments of policies and programs, and ensuring women's voices are heard in decision-making processes.
• By addressing these aspects, we can create a more inclusive society where women can fully participate in the workforce and achieve their potential.

Conclusion

In conclusion, achieving full participation of women in the workforce requires a comprehensive and collaborative approach involving the state, employers, and communities. By enacting supportive policies, promoting inclusive practices, challenging traditional gender norms, and integrating gender considerations into broader policy frameworks, we can create an enabling environment for women to thrive in their careers. It is through these concerted efforts that we can build a more equitable society and harness the immense potential that women bring to the workforce.

Why is it in the News?

As India approaches the 2024 elections, highlighting healthcare as a strategic investment rather than a fiscal burden can drive employment generation, bolster economic growth, and foster sustainable development.

Context:

• With India gearing up for the upcoming general elections, recognizing healthcare as a crucial investment for national well-being and prosperity is essential.
• Despite its pivotal role, healthcare tends to be sidelined in political discussions, necessitating a shift in focus.
• Rather than perceiving healthcare as a financial burden, it should be considered a strategic investment.
• Embracing healthcare as an investment offers substantial returns, contributing to human capital development, economic progress, and sustainable development.

What is Universal Health Care (UHC)?

• Universal Health Care (UHC) embodies the principle that everyone should have access to quality healthcare regardless of financial situation.
• It is regarded as a fundamental measure for promoting human equity, security, and dignity.
• UHC has gained widespread acceptance as a primary goal of public policy globally, with numerous countries successfully implementing it, including wealthier nations and emerging economies like Brazil, China, Sri Lanka, and Thailand.
• World Health Organization (WHO) defines universal healthcare as “all people and communities can use the promotive, preventive, curative, rehabilitative and palliative health services they need, of sufficient quality to be effective, while also ensuring that the use of these services does not expose the user to financial hardship.”

Challenges in Implementing Universal Health Care (UHC):

• Inequitable Access to Health Insurance: Disparities in health insurance coverage persist, with the lowest wealth quintile and marginalized sections facing limited access to insurance, as indicated by NFHS-5 results.
• Lack of Financial Protection: Despite initiatives like Janani Shishu Suraksha Karyakram, high out-of-pocket expenses, especially in urban areas, pose financial risks. NFHS data highlights significant disparities in expenditure across states.
• Inclusion and Exclusion Errors in Health Insurance Policies: Inaccuracies in health insurance policies, including PMJAY, lead to the inclusion of ineligible and exclusion of eligible households, affecting coverage effectiveness.
• Availability of Services: While PMJAY enlists hospitals, a significant portion is in the private for-profit sector, potentially limiting access to underserved areas.
• Inadequate Infrastructure: Insufficient healthcare facilities, equipment, and medical supplies hinder UHC implementation, compounded by a shortage of specialists in CHCs.
• Poor Health Education: Limited awareness about preventive health measures contributes to preventable illnesses, emphasizing the need for improved health education and promotion.

Steps For Achieving Universal Health Care (UHC):

• Increase in Public Health Expenditure: Commitment to allocate 2.5% of GDP to health by 2025 is crucial.
  • However, the current central budget allocation for 2024-25 falls short at 28%.
• Strategic Partnerships: The government must forge partnerships and incentivize the private sector to bridge healthcare gaps.
  • Initiatives like Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) illustrate this collaborative approach, covering over 60 crore people.
• Reimbursement Rates Correction: Private sector participation is hindered by low reimbursement rates.
  • Differential pricing based on clinical excellence and infrastructure investment can encourage participation.
• Infrastructure Development: Addressing the deficit of nearly 24 lakh hospital beds requires increased private sector investment, especially in tier 2 and 3 cities.
• National Priority Status for Healthcare: Designating healthcare as a national priority sector can unlock funding opportunities and incentives, fostering growth and development.
• Strengthening Primary Healthcare: Enhancing Health and Wellness Centers and including OPD care in health insurance coverage will improve health outcomes and reduce secondary and tertiary care burdens.
• Prevention and Control of NCDs: Prioritizing interventions at the primary healthcare level can significantly reduce the burden of non-communicable diseases, preventing complications and hospitalizations.
• Boosting Private Investment: Encourage and incentivize private sector investment in healthcare infrastructure, technology, and services to expand coverage and enhance healthcare accessibility and affordability for all citizens.

How Government can Generate Employment Through UHC in India?

Expanding the Healthcare Workforce: Universal healthcare will significantly increase the demand for healthcare professionals, creating millions of new jobs. This includes doctors, nurses, paramedics, technicians, pharmacists, and other support staff. The government can address this need by:

• Scaling Up Medical Education: Increased investment in medical colleges and nursing schools is crucial.
  • This includes establishing new institutions, expanding existing ones, and introducing scholarship programs to attract talent.
  • Standards for medical education must be maintained to ensure a high-quality workforce.
• Skill Development Initiatives: Developing a robust skill development ecosystem specific to healthcare is essential.
  • This involves creating standardized training programs for various healthcare professions.
  • Skill development should not be limited to clinical skills but also encompass areas like communication, empathy, and public health awareness.
• Attracting and Retaining Talent: Competitive salaries, loan repayment programs, and career progression opportunities can incentivize students to pursue healthcare careers.
  • Additionally, considering the rural-urban divide, special incentives like higher pay and improved living conditions can attract healthcare professionals to serve in underserved areas.

Building a Robust Healthcare Infrastructure: Universal healthcare necessitates a well-developed healthcare infrastructure. This translates to significant job creation across various sectors:

• Infrastructure Development: Building new hospitals, clinics, diagnostic centers, and public health centers requires construction workers, engineers, architects, and technicians.
• Medical Equipment Manufacturing: Increased demand for medical equipment, from basic diagnostic tools to advanced technology, can incentivize local manufacturing.
  • This can create numerous jobs in production, maintenance, and research & development.
• Pharmaceutical Industry: Universal healthcare will significantly raise the demand for pharmaceuticals.
  • This can boost domestic production, generating jobs in manufacturing, distribution, and research & development.

The Role of Public-Private Partnerships (PPPs):

• The government cannot shoulder the entire responsibility alone. PPPs can play a vital role in expanding healthcare infrastructure and creating job opportunities:
• Strategic Partnerships: Collaboration with private hospitals and clinics can leverage existing infrastructure and expertise.
  • The government can purchase services from the private sector, ensuring wider reach and quality care, while creating jobs within these institutions.
• Incentivizing Expansion: Tax breaks, subsidies, and streamlined licensing processes can incentivize private players to expand their facilities and hire more staff.
  • This creates a multiplier effect, leading to job creation in construction, logistics, and other associated sectors.

Technology and its Role in Employment: Technology holds immense potential to improve healthcare delivery and create new job opportunities:

• Telehealth and Digital Health Records: Investment in telemedicine infrastructure and digital health records can create jobs in IT, data management, and cybersecurity.
  • Additionally, telemedicine can bridge the gap in rural healthcare, requiring trained personnel to operate these services.
• Medical Informatics: The use of big data and analytics in healthcare will require skilled professionals to collect, analyze, and interpret data to improve healthcare delivery and outcomes.

Conclusion

Universal healthcare in India can be a transformative force, not just for public health, but also for the nation's economic landscape. By strategically investing in workforce development, fostering public-private partnerships, and embracing technological advancements, India can unlock a vast employment potential. This not only creates a win-win for job creation and healthcare access but also paves the way for a healthier and more prosperous future for all Indians.

Why is it in the News?

According to the India Employment Report 2024 by the ILO and IHD, nearly 83% of the unemployed workforce comprises youth, with the percentage of educated unemployed youth more than doubling from 35.2% in 2000 to 65.7% in 2022.

India Employment Report 2024:

• The India Employment Report 2024, the third installment in the series of publications by the Institute for Human Development focusing on labor and employment concerns, is conducted in collaboration with the International Labour Organization (ILO).
• This report delves into the issue of youth employment, analyzing the evolving economic, labor market, educational, and skills landscapes in India over the past twenty years.
• It sheds light on recent trends in the Indian labor market, showcasing both positive advancements and enduring challenges, including those exacerbated by the COVID-19 pandemic.

Key Insights from the India Employment Report 2024:

• Drawing from data sourced from National Sample Surveys and Periodic Labour Force Surveys spanning 2000 to 2022, the report offers a comprehensive analysis of employment trends and the present landscape.

Employment Trends & Current Scenario:

• Female labor market participation, after a notable decline in previous years, exhibited accelerated growth post-2019, particularly in rural regions.
• A noticeable trend in the Indian labor market is the gradual shift of the workforce from agriculture to non-farm sectors.
• Self-employment and casual employment dominate India's employment landscape, with approximately 82% of the workforce engaged in the informal sector, and nearly 90% informally employed.
• While wages for casual laborers saw modest growth from 2012 to 2022, real wages for regular workers stagnated or declined.
• Official surveys inadequately capture migration levels in India, expected to significantly rise along with urbanization in the future, reaching around 40% migration rate and a 607 million urban population by 2030.

Challenges of Youth Employment:

• Despite a sizable working-age population, India's youth demographic, accounting for 27% of the total population in 2021, is projected to decline to 23% by 2036.
• Each year, approximately 7-8 million youths join the labor force, presenting an opportunity for India to capitalize on the demographic dividend.
• Youth labor market participation has historically been lower than adults, primarily due to higher education enrollment rates.
• Youth unemployment witnessed a notable increase from 5.7% in 2000 to 17.5% in 2019, declining to 12.1% in 2022 post-lockdowns.

Recommendations:

• The report underscores five key policy domains for comprehensive action, focusing on both general employment enhancement and youth-specific interventions:
  • Promoting job creation
  • Enhancing employment quality
  • Addressing labor market disparities
  • Strengthening skills and active labor market policies
  • Bridging knowledge gaps on labor market dynamics and youth employment.

What is the International Labour Organization (ILO)?

• The International Labour Organization (ILO) is a United Nations (U.N.) agency.
• The goal of the ILO is to advance social and economic justice by setting international labor standards.
• The ILO has 187 member states and is headquartered in Geneva, Switzerland, with approximately 40 field offices around the world.
• The standards upheld by the ILO are broadly intended to ensure accessible, productive, and sustainable work worldwide in conditions of freedom, equity, security, and dignity.

Understanding the ILO

• It was founded in 1919 under the League of Nations and incorporated into the U.N. as a specialized agency in 1946.
• The ILO is the first and oldest specialized agency of the U.N.
• The organization’s goal is to serve as a uniting force among governments, businesses, and workers.
• It emphasizes the need for workers to enjoy conditions of freedom, equity, security, and human dignity through their employment.
• The ILO promotes international labor standards through its field offices in Africa, Latin America, the Caribbean, the Arab States, Asia and the Pacific, and Europe and Central Asia.
• The organization provides training on fair employment standards, offers technical cooperation for projects in partner countries, analyzes labor statistics and publishes related research, and regularly holds events and conferences to examine critical social and labor issues.
• The ILO was awarded the Nobel Peace Prize in 1969.
  • The organization was recognized for improving fraternity and peace among nations, pursuing decent work and justice for workers, and providing technical assistance to developing nations.
• The labor standards set forth by the ILO have been published in 190 conventions and six protocols.
• These standards recognize the right to collective bargaining, attempt to eliminate forced or compulsory labor abolish child labor, and eliminate acts of discrimination concerning employment and occupation.
•  As a result, the protocols and conventions of the ILO are a major contributor to international labor law.

Structure:

• A unique feature of the ILO is its tripartite character.
• The membership of the ILO ensures the growth of the tripartite system in the Member countries.
• At every level in the Organization, Governments are associated with the two other social partners, namely the workers and employers.
• All three groups are represented in almost all the deliberative organs of the ILO and share responsibility for conducting its work.
• The work of the Conference and the Governing Body is supplemented by Regional Conferences, Regional Advisory Committees, Industrial and Analogous Committees, Committee of Experts, Panels of Consultants, Special Conference and meetings, etc.

The three organs of the ILO are:

• International Labour Conferences: General Assembly of the ILO – Meets every year in June.
• Governing Body: Executive Council of the ILO. Meets three times a year in March, June, and November.
• International Labour Office:  A permanent secretariat.

India & ILO:

• India is a founder member of the International Labour Organization, which came into existence in 1919.
• At present the ILO has 187 Members.

About the Institute of Human Development (IHD):

• Founded in 1998 under the patronage of the Indian Society of Labour Economics (ISLE), the Institute of Human Development (IHD) is dedicated to fostering a society that embraces an inclusive social, economic, and political framework, devoid of poverty and deprivation.
• IHD's core mission revolves around conducting research in diverse domains such as labor and employment, livelihood, gender, health, education, and various facets of human development.
• Through its endeavors, IHD seeks to generate knowledge and insights that contribute to the advancement of human welfare and societal well-being.

Why is it in the News?

Recently, there has been growing concern about the urban employment scenario for women in India, revealing a significant gap between the demand for employment and the opportunities available to urban women.

Context:

• According to the Periodic Labour Force Survey (PLFS), there has been a notable rise in women's workforce participation in India, increasing from 22% in 2017-18 to 35.9% in 2022-23.
• Despite this growth, India's female labor force participation rate (FLFPR) remains lower than the global average of 47% and lags behind countries like China, which boasts an FLFPR of 60%.
• While there has been progress, the FLFPR in India still presents a considerable gap.

Rural Areas:

• The FLFPR in rural areas has shown significant improvement, rising to 41.5% in 2022-23 from 24.6% in 2017-18.

Urban Areas:

• In urban regions, the FLFPR has also experienced growth, increasing to 25.4% in 2022-23 from 20.4% in 2017-18.
• However, women's employment rates in urban areas stood at 22.9% in the last quarter of 2023.

What is the Current Situation (Unmet Employment Demand)?

• The current landscape highlights a substantial unmet demand for employment among urban women, indicating a disparity between urban and rural areas.
• Urban areas exhibit a notably higher proportion of unemployed women actively seeking employment compared to their rural counterparts, with an unemployment rate of 9% in urban regions versus 4% in rural regions.

Two Categories of Unemployment:

• Unemployment manifests in two forms: individuals actively seeking employment and those desiring to work but not engaging in active job-seeking.
• Underutilized Potential: Approximately 25% of urban women have attained higher secondary education, a stark comparison to the 5% in rural areas, suggesting significant untapped potential.
  • The low urban employment rates among women underscore the underutilization of their skills and qualifications.
• Role of MGNREGA and Deendayal Antyodaya Yojana National Rural Livelihood Mission (DAY-NRLM): Initiatives like MGNREGA and DAY-NRLM have played a vital role in empowering women financially in rural settings, with over half of the MGNREGA workforce comprising women.
• However, urban settings present unique challenges. Social norms, safety concerns, and inadequate transportation options pose significant barriers to urban women's workforce participation.

Causes of Urban Unemployment Among Women in India:

• Challenges of Social Norms and Safety: Urban women face barriers to entering the workforce due to entrenched social norms, safety concerns, and inadequate transportation options, which hinder their participation.

• Gender-Based Occupational Segregation: Gender-based segregation of occupations and sectors persists in India, leading to limited growth in job opportunities for women and reduced participation rates.
• Economic Impacts: The rapid adoption of new technologies in response to the pandemic has resulted in widespread unemployment, particularly due to business closures and job losses.
  • This has widened the skill gap among job seekers.
• Population Growth: The increasing population and labor force contribute to rising unemployment in India, making it challenging for economic growth to keep pace with population expansion.
• Insufficient Investment: Insufficient investment in unorganized sectors, Micro, Small, and Medium Enterprises (MSMEs), and rural development exacerbates unemployment among women.
  • Combined with safety concerns and regressive social norms, this leads to underemployment or unemployment.
• Financial Burden: Calculations suggest that funding 150 days of work per year at ?500 daily wages would cost around 1.5% of the GDP. Factoring in material and administrative expenses, this could increase to around 2%.

Proposed Solutions:

• Government Initiatives: The government has introduced protective provisions in labor laws to ensure equal opportunities and a supportive work environment for women.
• Need for Women's Urban Employment Guarantee Act (WUEGA): To address urban unemployment comprehensively, there is a call for a national-level Women's Urban Employment Guarantee Act (WUEGA) and a Decentralized Urban Employment and Training Scheme akin to MGNREGA for rural women.

Vision for Women's Urban Employment Guarantee Act (WUEGA):

• The vision for WUEGA entails women comprising at least 50% (ideally 100%) of the program management staff, fostering gender inclusivity and empowerment at all levels of decision-making.
• Involving women and local communities in program management can enhance the constitutional principle of decentralization, ensuring grassroots participation and ownership.
• Every worksite under WUEGA would be equipped with essential facilities, including childcare services, to support working mothers and promote their participation in the workforce.
• Job opportunities provided by WUEGA will be accessible within a 5-km radius of each participant's residence, with free public transportation available for women, ensuring ease of access to employment opportunities

What are Some Key Urban Employment Initiatives?

• Atmanirbhar Bharat Rojgar Yojana (ABRY): Launched under Atmanirbhar Bharat package 3.0, ABRY incentivizes employers to create new employment opportunities while providing social security benefits and addressing employment loss during the Covid-19 pandemic.
• Pradhan Mantri Garib Kalyan Rojgar Abhiyaan (PMGKRA): PMGKRA focuses on providing immediate employment and livelihood opportunities to distressed individuals, emphasizing the creation of public infrastructure and livelihood assets in rural areas.
• Deendayal Antyodaya Yojana-National Urban Livelihoods Mission (DAY-NULM): DAY-NULM aims to alleviate poverty and vulnerability among urban poor households by facilitating access to self-employment and skilled wage employment opportunities.
• Women-led Waste Management: In Karnataka, women-led initiatives in waste management have empowered women to manage waste collection and drive 'Swacch' vehicles, leading to successful outcomes and increased acquisition of driving licenses among women.
• Pradhan Mantri Rojgar Protsahan Yojana (PMRPY): PMRPY incentivizes employers to generate new employment opportunities, thereby contributing to job creation across various sectors.
• National Career Service (NCS) Project: NCS offers comprehensive career-related services including job matching, career counseling, vocational guidance, and information on skill development courses, internships, and apprenticeships.
• PM Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi): PM SVANidhi provides collateral-free working capital loans up to ?10,000 with a one-year tenure to approximately 50 lakh street vendors, enabling them to restart their businesses post the Covid-19 lockdown.

Way Forward:

• Existing urban work opportunities, such as plantation and harvesting reeds on floating wetlands, should be expanded and tailored to local needs through inclusive community consultations.
• Introducing incentives, such as automatic inclusion in welfare boards, can serve as a mechanism to provide essential benefits like maternity entitlements, pensions, and emergency funds, thereby promoting economic security and social welfare for women.
• Closing gender gaps and empowering women align with the Sustainable Development Goals, underscoring not just ethical and constitutional obligations but also the potential for women's increased workforce participation to drive economic growth.
• Addressing societal norms and challenges that hinder women's workforce participation is crucial for fostering an inclusive and equitable work environment.
• Furthermore, the implementation of additional initiatives and policies aimed at promoting women's participation in the workforce will play a pivotal role in advancing the female labor force participation rate in India.

Why in the News?

• Based on the Periodic Labour Force Survey (PLFS), India's unemployment rate reached a peak of 6.1% in 2017, which was the highest ever recorded.
• However, the latest PLFS data from 2021-22 indicates a decrease to 4.1% in unemployment.
• This article underscores the challenges in accurately measuring unemployment in India.
• While there has been a reduction in unemployment from 2017 to 2022, it is still higher than the rates observed in some developed economies, such as the United States, where it hovers around 3.5%.

What is the Meaning of Unemployment:

• As per the International Labour Organisation (ILO), unemployment involves being without a job, being ready to accept a job, and actively seeking employment.
• In other words, if someone loses their job but doesn't actively seek another, they are not considered unemployed. Hence, unemployment is distinct from being without a job.

Measuring the Unemployment Rate:

• The unemployment rate is calculated by dividing the number of unemployed individuals by the total labor force.
• The labor force is the combined count of both employed and unemployed individuals.
• People who are neither employed nor unemployed, like students and those involved in unpaid domestic work, are categorized as outside the labor force.
• It's important to note that the unemployment rate may also decrease when an economy doesn't create sufficient jobs or when individuals choose not to actively seek employment.

Challenges in Measuring Unemployment in India:

• Cultural Factors: Social norms and cultural constraints influence job search decisions in developing economies like India.
• A definition of unemployment that relies on active job seeking may underestimate the true situation.
• Informal Work: In contrast to developed economies, individuals in India often hold informal, intermittent jobs.
• This means someone might be unemployed one week but engaged in various roles over time, such as casual labor or farming.
• Varying Methodologies: Different organizations use distinct methodologies to measure unemployment.
• For instance, the Centre for Monitoring Indian Economy categorizes individuals based on their daily activity preceding the interview, leading to variations in unemployment rates and labor force participation rates.
• Data Timing: Timing can also impact unemployment rates.
• For example, the lockdown in March 2020 had a profound effect on the Indian economy, but this disruption was not immediately reflected in the PLFS unemployment rates, which cover a period from July of one year to June of the next.
• Trade-offs: Developing economies face trade-offs in choosing reference periods for data collection.
• Shorter periods yield higher unemployment rates and lower employment rates, while longer periods tend to show the opposite.
• This dilemma is less common in developed nations with more consistent, year-round employment.

Differences in Rural and Urban Unemployment Rates in India:

• The lenient criteria for categorizing someone as employed contribute to the lower unemployment rates in rural regions compared to urban areas.
• Agricultural economies provide individuals with opportunities like family farming or occasional agricultural work, increasing the likelihood of finding some form of employment in rural settings.
• While these definitions may seem to 'underestimate' unemployment, they were primarily crafted to account for the substantial informal economy prevalent in these areas.

Classifying Employment Status in India:

• The National Sample Survey Organisation (NSSO) employs two primary methods for this purpose: Usual Principal and Subsidiary Status (UPSS) and Current Weekly Status (CWS).
• UPSS determines an individual's primary employment status based on their predominant activity during the previous year, whether employed, unemployed, or out of the labor force.
• For instance, even if someone's principal status is not that of a worker, they would still be considered employed under UPSS if they engaged in economic activity in a subsidiary role for a period of not less than 30 days.
• CWS, on the other hand, uses a shorter reference period of one week. An individual is counted as employed if they worked for at least one hour on at least one day during the seven days leading up to the survey date.
• UPSS unemployment rates consistently tend to be lower than CWS rates because it is more likely that individuals will find employment over the course of a year compared to just one week.

Unemployment is becoming a significant issue in the upcoming election. To address it effectively, it's crucial to grasp how unemployment is defined and measured in a developing economy like India.

Mains Question:

• Discuss the challenges associated with measuring unemployment in India and how these measurement methods impact our understanding of the employment situation in the country. (15M)