Job situation has overcome Covid impact in country: FinMin

The finance ministry, in its latest monthly economic report for October 2022, has said that with the recovery in economic activities across sectors, the overall employment situation has also improved in the country, overcoming the impact of the Covid-19 pandemic. The periodic labour force survey (PLFS) shows the urban unemployment rate for people aged 15 years and above declining from 12.6% in the quarter ending June 2021 to 7.6% one year later, says the ministry report. The rural unemployment rate, which remains a challenge for the government, is also showing a sign of decline.

"This is accompanied by an improvement in the labour force participation rate (LFPR) as well, reflecting that by the time the current year was one-quarter over, the economy had come out of the grip of the COVID-19-induced slowdown," said the finance ministry.

High-frequency indicators (HFIs) also support an improvement in employment generation across sectors. "Based on the EPFO records, net payroll additions in September 2022 registered year-on-year growth of 46% reflecting improved formalisation of the economy coming along with a pick-up in economic activity."

The government says that employment components of PMI manufacturing and PMI services continue to be in an expansionary zone, with October 2022 data highlighting the 8th month of successive increase in employment across the Indian manufacturing industry driven by sales growth and a rise in output.

Employment in services companies also witnessed a rise in October 2022 to support greater output requirements owing to a further upturn in new businesses.

The Naukri Job Speak Index released by Naukri.com also shows hiring activity moderating in October 2022 compared to the previous month owing to festivities yet showing resilience with a growth of 13% compared to the festive window last year.

Amid positive employment numbers in urban India, the demand for work under MGNREGS has been declining since May 2022 and was at its lowest in October 2022, since the beginning of the current financial year, signalling a decline in the unemployment rate in rural areas, says the ministry. The ministry sees a rise in employment in agricultural and nonagricultural activities stemming from the normalisation of the rural economy and stabilisation in the rural job market.

The data released by a private think tank, the Centre for Monitoring Indian Economy (CMIE), earlier this month also showed that over 8.5 million salaried jobs were added cumulatively during September and October 2022, the highest since March 2020. With this, the total salaried workers in the country stood at 85-86 million, which suggests salaried jobs are back to pre-pandemic levels after 32 months.

However, India's unemployment rate surged to 7.77% in October as compared to a four-year low of 6.43% in September, primarily due to a significant rise in the rural unemployment rate, essentially in non-agricultural rural India.

Notably, the TeamLease Employment Outlook Report states that global employment growth, having recovered by 2.7% in 2021, is expected to grow sharply further by the end of 2022 and slow down again in 2023. A step-up in hiring activity in the quarter ending December 2022 is expected on account of a rebound in new business gains, with the growth in the index of hiring intentions being strongest in India.