India created 4.66 cr jobs in FY24; employment growth rate rises to 6%: RBI data

Over 4.66 crore jobs were added in India during the financial year 2023-24, taking the total number of employed persons in the country to 64.33 crore, as per the latest data released by the Reserve Bank of India (RBI). The provisional employment growth rate for the last fiscal was 6%.

The country employed 59.66 crore people in 2022-23 across 27 industries, with year-on-year employment growth of 3.31%, contributing to a 6.6% change in the gross value addition, according to the RBI data published on July 8.

The ‘Measuring Productivity at the Industry Level – The India KLEMS Database’ report comes days after a Citibank report highlighted the inability of the country to create enough jobs for all.

The KLEMS data covers 27 industries including Agriculture, Manufacturing, Financial Services, Education and Health from 1980-81 to 2022-23. The report compares a diverse range of indicators including Gross Value Added (GVA), Gross Value of Output (GVO), Labour Employment (L), Labour Quality (LQ), Capital Stock (K), Labour Productivity (LP) and Total Factor Productivity (TFP). The dataset provides sectoral estimates as well, comprising the agriculture, manufacturing and services sectors.

The agriculture and allied industry saw a nominal Y-o-Y growth of 1.9% in employment of 25.3 crore individuals in 2022-23. While employment growth rate in the service sector declined from 3.8% in 2021-22 to 3.3% in 2022-23, value addition growth rate increased from 8.7% to 9.4% in 2022-23. The manufacturing sector saw a decline in GVA growth rates with a slight increase of 2.7% in employment in 2022-23.

“The production and publication of the India KLEMS database are meant to support empirical research in the area of economic growth and its sources,” RBI said. RBI emphasised that the data will support the conduct of policies which intend towards acceleration of productivity growth in the economy.

The Citibank report, that preceded this data release, stated that even a near 7% GDP growth rate will create only 8-9 million jobs and might not fulfil the job requirement over the next decade. The Ministry of Labour and Employment yesterday responded to the report’s claims with a rebuttal, claiming that the group fails to account for the comprehensive and positive employment data available from official sources.

Quoting data from the Perioding Labour Force Survey and RBI, the Ministry said that the country has generated more than 8 crore employment opportunities between 2017-18 and 2021-22, translating into an average of over 2 crore jobs each year, despite an adverse impact of COVID-19 pandemic.

“This significant employment creation demonstrates the effectiveness of various government initiatives aimed at boosting employment across sectors,” the statement said.

The government argued that the Annual PLFS report gives a more optimistic picture of the Indian job market as the labour force participation has increased from 49.8% in 2017-18 to 57.9% in 2022-23 aside from improvement in other indicators. In the year 2023-24, over 1.3 crore subscribers joined EPFO which is more than twice the number of subscribers who joined EPFO in 2018-19 showing an increase in formally employed workers. The government also shared that the Indian Staffing Federation (ISF) informed the former about the employment of about 54 lakh formal contract workers and the unfulfilment of nearly 30% of demand across manufacturing, retail, and banking due to talent shortages and labour mobility. The Ministry expects robust growth of the gig economy that again substantiates India's potential to generate diverse employment opportunities.

The government argued that conclusions based on private data sources can be misleading as these use their own derived definition of employment with a methodology often critiqued for not being as representative as official data sources and that selective data chosen by their authors undermines the credibility of their analysis.