Has India Tackled the Problem of Unemployment? Check Latest RBI Report on Employment Growth Rate

A recent report from the Reserve Bank of India (RBI) reveals that India saw a significant increase in job creation in the financial year 2024 compared to 2023.

In FY24, the nation generated 4.67 crore new jobs, bringing the total number of provisional positions to 64.33 crore, up from 59.67 crore in FY23. This data, derived from the RBI's Measuring Productivity at Industrial Level  The India KLEMS (capital, labor, energy, material, services) program, significantly surpasses estimates from private surveys that often emphasize high unemployment rates in the country.

India’s Employment Growth Rate

India's employment increased by 6% in FY24 compared to 3.2% in FY23, according to RBI data. For the first time in history, the RBI is using a provisional estimate of productivity for the entire economy based on available data. 

According to Citibank estimates, India's economy will increase by 7%, creating between 80 lakh and 90 lakh new employment. Currently, the country needs 1.1 crore to 1.2 crore jobs.

Key Challenges That Still Prevails

As reported by Bloomberg, India faces challenges in job quality and lack of employment in the formal sector. About 46% of the workforce is employed in agriculture, which contributes less than 20% to the GDP. The manufacturing sector accounted for 11.4% of total jobs in 2023.

Post-Pandemic Vs Pre-Pandemic

Compared to the pre-pandemic period, fewer people are now employed in the formal sector. Bloomberg reports that only 25.7% of workers are in the formal sector, the lowest in 18 years.

• Rising Unemployment Rate: According to the Centre for Monitoring Indian Economy (CMIE), the percentage of people without a job climbed from 7% in May to 9.2% in June.
• Unemployment Trends: The unemployment rate rose to 8% in FY24, up from 7.5% and 7.7% in the two years before.
• Job Seekers: Data shows that in FY24, there were 3.7 crore people actively looking for work.

Take a look at the following table to understand the gist of this difference:

Employment has always been an important issue in the Indian political scenario. This is the issue that has always registered its presence in the election manifestos of all political parties, irrespective of their political beliefs and political leanings.