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)