In India, a substantial number of individuals have turned to self-employment and unpaid labor, as indicated by data from the Periodic Labor Force Survey (PLFS) spanning from July 2022 to June 2023. Notably, among the major religious groups, only Muslims have experienced a decline in their labor force participation rate (LFPR) and worker population ratio (WPR).
The PLFS, initiated by the National Sample Survey Office in April 2017, provides essential employment and unemployment metrics, such as Worker Population Ratio, Labor Force Participation Rate, and Unemployment Rate. It also examines employment status across different social and religious groups, including Hinduism, Islam, Christianity, and Sikhism.
Despite a seemingly positive note indicating a six-year low in India’s unemployment rate for individuals aged 15 and above, standing at 3.2%, the data reveals a more nuanced picture. While the unemployment rate has decreased in both rural and urban areas, other aspects of employment dynamics require closer examination.
One notable trend is the increasing prevalence of self-employment. The PLFS data shows a higher number of individuals engaged in self-employment compared to those in casual labor or regular salaried positions. The overall rate of self-employed individuals has been steadily rising, reaching 57.3% in 2022-23 from 55.8% in 2021-22 and 55.6% in 2020-21. Within the self-employed category, there has been a notable increase in unpaid family labor.
The rise in unpaid labor, categorized as ‘helper in household enterprise’ within self-employment, reflects the changing employment landscape. More people are opting for self-employment due to limited access to quality work and wages. This shift towards self-employment is partly driven by economic challenges and a lack of appealing job opportunities. However, this trend also raises questions about the quality of employment being generated.
The data also sheds light on employment numbers in various sectors. While there is a noticeable increase in self-employment, better-paying jobs in sectors like manufacturing and construction have remained stagnant. The percentage of individuals employed in the manufacturing sector was 11.4% in 2022-23, slightly lower than 11.6% in the previous year. The construction sector saw a similar trend, with 13% of the workforce employed in 2022-23. Additionally, the trade, hotel, and restaurant sector maintained a consistent employment rate of around 12%.
While these statistics indicate the changing employment landscape, the data also reveals that Muslims have experienced a decline in their labor force participation rates (LFPR) and worker population ratios (WPR). This indicates that despite the general improvement in the labor market, the Muslim community has not seen the same benefits. The LFPR for individuals aged 15 and above has increased overall but declined for Muslims. Similarly, the WPR for Muslims has decreased while it has risen for the broader population.
These findings underscore the complexity of India’s employment dynamics, reflecting disparities in labor force participation and employment quality among different religious and social groups.