Govt rebuts Citigroup's claim that India will fail to plug jobs gap with 7% growth

The ministry of labour and employment on Monday issued a rebuttal to a Citigroup report which forecast that India will struggle to create sufficient employment opportunities even with a 7% growth rate.

The report fails to account for the comprehensive and positive employment data available from official sources such as the Periodic Labour Force Survey (PLFS) and the Reserve Bank of India's data, the government says.

The ministry says it strongly rebuts such reports which do not analyse all official data sources available in the public domain.

Citigroup report fails to consider the positive trends and comprehensive data from official sources, the ministry says.

RBI data indicates more than 8 crore employment opportunities created from 2017-18 to 2021-22 translating to an average of over 2 crore employment per year. This was despite the fact that the world economy was hit by COVID-19 pandemic during 2020-21 which contradicts Citigroup’s assertion of India’s inability to generate sufficient employment, the government says.

This significant employment creation demonstrates the effectiveness of various government initiatives aimed at boosting employment across sectors, it adds.

“The Annual PLFS report depicts an improving trend in labour market indicators related to: (i) Labour Force Participation Rate (LFPR), (ii) Worker Population Ratio (WPR) and (iii) Unemployment Rate (UR) for persons of age 15 years and above during 2017-18 to 2022-23. For instance, the WPR i.e. employment has increased from 46.8% in 2017-18 to 56% in 2022-23. Similarly, the labour force participation has also increased in the country from 49.8% in 2017-18 to 57.9% in 2022-23. The Unemployment Rate has declined from 6.0 % in 2017-18 to a low of 3.2% in 2022-23,” the ministry says.

The PLFS data shows that during the last five years, more employment opportunities have been generated compared to the number of people joining the labour force, resulting in a consistent reduction in the unemployment rate, the ministry points out. “This is a clear indicator of the positive impact of government policies on employment. Contrary to the report, which suggests a dire employment scenario, the official data reveals a more optimistic picture of the Indian job market,” it says.

“The formal sector employment figures are also being bolstered by government efforts to improve ease of doing business, enhance skill development, and provide incentives for job creation in both the public and private sectors. The EPFO data suggests that more and more workers are joining formal jobs. During 2023-24, more than 1.3 crore subscribers joined EPFO which is more than double compared to 61.12 lakh joined EPFO during 2018-19. Moreover, during last six and half years (since September, 2017 to March, 2024) more than 6.2 crore net subscribers have joined EPFO,” the ministry states.

The data from National Pension System (NPS) indicates that more than 7.75 lakh new subscribers have joined the NPS during 2023-24 under the Central and State governments which is 30% more than 5.94 lakh new subscribers joining NPS under government sector during 2022-23.

The ministry says Global Capability Centers (GCCs) in India have shown remarkable growth in recent years. “The NITI Aayog report on gig economy projects a substantial increase in platform workers, which is expected to reach 2.35 crore (23.5 million) by 2029-30, underscoring the rapid expansion of the gig economy. The gig workers are expected to form 6.7% of the non-agricultural workforce or 4.1% of the total livelihood in India by 2029-30,” it says.

The ministry emphasises the credibility and comprehensiveness of official data, cautioning against the selective use of private data sources that can lead to misleading conclusions about India's employment scenario.