A large number of people without regular employment is a glaring deficiency in the Indian economy that is ranked among the top five economies globally in terms of domestic production. Yet, the latest Periodic Labour Force Survey for 2023-24, conducted by the Government of India, claims that only 3.2% of the nation’s labour force is unemployed. This figure has remained unchanged from that of the previous survey of 2022-23. This rate of unemployment would not be a cause for concern in any economy and might be considered close to the natural rate of unemployment, which includes people who are temporarily unemployed because they are either looking for jobs or are in between jobs. But a closer look at the latest PLFS data indicates two worrying trends. The first relates to data showing that a higher proportion of the labour force is moving towards low-paid, low-productivity agricultural jobs. The second is that a larger number of working-age men and, particularly, women are being clubbed in the unpaid family labour category. According to the survey, the workforce engaged in agriculture has increased from 45.5% in 2021-22 to 46.1% in 2023-24. As for the self-employed but unpaid workers in household enterprises, the number has increased from 17.5% in 2021-22 to 19.4% in 2023-24.

The universal trend marking modern economic growth shows that over time the proportion of workers in agriculture declines. This trend was once true in India but it has reversed recently indicating a problem in the availability of quality jobs. Unpaid helps in household enterprises are not considered a valid category of employment by the International Labour Organization because these jobs do not assign specific wages to be paid but reflect an implicit right to a share of the total produce created. Most experts consider this as a form of disguised unemployment. An increase in this category also indicates a deterioration in the quality of employment. The fact that total unemployment is unchanged but low-quality jobs have increased suggests that the higher-paid, better-quality jobs in manufacturing, especially in the micro, small and medium enterprises sector, have stagnated or fallen. With a range of new, labour-saving technologies beginning to enter manufacturing and modern services sectors, the possibility of a large number of high-quality jobs arising is bleak. The government should refrain from being defensive on unemployment and focus on a problem that is likely to become unmanageable in the days to come.