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9th November 2023 (15 Topics)

Questions over Employment

Context –

Recent Increase in Female Labour Force has concerns associated.

Rising Female Labour Force Participation

  • Surge in Participation: The labour force participation rate for females in India saw a substantial increase, particularly in rural areas, rising from 18.2% in 2017-18 to 30.5% in 2022-23. Across varied education levels, including uneducated and graduates, the worker population ratio increased significantly.
  • Employment Types: A noteworthy observation is the increased employment in self-employed roles, mainly in household enterprises. These workers weren't engaged in regular wage employment, highlighting a lack of salaried opportunities.
  • NREGA and Economic Trends: Under NREGA, women's participation increased, indicating a preference for less remunerative employment. Despite healthy agricultural growth, the non-farm sector's slowdown contributed to financial distress, possibly prompting increased female labour participation.

Trend Analysis of Participation Rates

  • Periodic Labour Force Survey Data: Examining the data over the years, the most significant increases in female labour participation occurred in 2019-20, followed by 2022-23 and 2020-21. The agricultural sector demonstrated growth, but non-farm sectors experienced a slowdown attributed to financial constraints, particularly the NBFC crisis and subsequent economic impacts.
  • Financial Influence on Labour Market: The financial distress in rural areas due to reduced fund flows and subdued wage growth possibly led to a surge in female participation. However, recent trends in improved fund inflow and smaller firm performance hint at a change in the situation, with potential positive implications for employment and income growth.
  • Economic Implications and Recent Developments
  • Revival in Financial Environment: Recent indicators suggest improvements in rural credit growth and small firm performance, indicating potential economic recovery.
  • Healthier Performance Sector: Reports highlight healthier performances by smaller players in segments like FMCG, potentially signaling better employment and income opportunities.
  • Wage Growth and Economic Revival: Signs of wage growth and increased credit flow through NBFCs in rural areas indicate a positive shift in employment and financial prospects, portraying an improving economic scenario with potential benefits for labour force participation.
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