Workforce Struggles
“Despite growing towards lower levels of poverty, India is alarmingly moving towards a struggling working class at risk of falling into poverty. The latest joint report of ILO and IHD indicated that between 2012-2022, the average monthly real earnings of regular salaried workers declined by 1 percent each year, pointing towards poor-quality employment,” Chandra Shekhar, Partner, Posterity Consulting said.
Consumption Patterns and Inflation
As per a TOI report, the consumption pattern of India is similar to that of the US in the 1960s. The share of India’s domestic consumption to GDP was around 60% in 2022. As per the report, the Indian population spent nearly 30 percent of their income on food, followed by transportation, housing, and then on clothing, education, health, etc. In comparison, the US spends nearly 50 percent of their income on services, followed by healthcare, housing, and then food.
“India has one of the most affordable and subsidized healthcare and education systems in Asia, hence the low expenditure. However, the Indian consumption share is highly skewed towards basic necessities like food. Even with a growing economy, an average Indian consumer still spends more on necessities and less on surpluses, comfort, and luxury. With the NNI increasing, it is expected that the priorities of the population will differ as well, but that is not the case,” Chandra Shekhar said.
Workforce and Unemployment Trends
The national minimum salary of Rs 176 per day in India varies across states, industries, and skill levels. In terms of numbers, as per the NSO payroll report, 2023, younger age brackets consistently contribute the most to new EPF subscribers, with approximately 20% in the age group of 18-25 years, underscoring the dynamic nature of its workforce. A variance analysis indicates varying growth patterns within age groups, with younger cohorts showing more consistent growth than older ones. However, a single statistic does not showcase the complete picture. As per the India Employability report (2024) by ILO, the proportion of unemployed youth with an education grew from 54.2 percent in 2000 to 65.7 percent in 2022. Additionally, the report highlighted that the unemployment rate among graduates in India stands at 29.1% compared to uneducated individuals at 3.4%, with women facing higher levels of unemployment.
Job Creation Initiatives and Sectoral Challenges
While initiatives like the Pradhan Mantri Rojgar Protsahan Yojana (PMRPY) and the Aatmanirbhar Bharat Rozgar Yojana (ABRY) have been launched to incentivize job creation, providing crucial support during the COVID-19 recovery phase, the private sector has been unable to keep up with the growing demand for formal jobs in India. “As indicated in the ILO report, post-2019 there has been a significant fall in non-agriculture employment, with manufacturing being the worst offender. For all the harping about Make in India by the private sector, the employment percentage of the manufacturing sector has stagnated around 13-14 percent, and even then, a majority of the blue-collar workforce was not provided salaries to sustain a decent livelihood in the current economy,” Chandra Shekhar said.Gig workers are at even worse with no socio-economic security rendering them skeptical to move to cities given inconsistent wages are not enough to sustain life in major cities where cost of living is much higher than rest of India and teir2 and 3 cities usually don’t offer higher wages for same work.
Gender Disparity and Employment Support
Among the trends is the growing concern of low female participation in the Indian job market. Males have consistently dominated the new EPF subscribers over the years, making up 81.9% of the total new subscribers in 2017 compared to 18% women. It is worth noting that during the peak COVID period, the percentage of male new EPF enrolments rose to 90.7%, an all-time high in 2020, while the number for women fell to 9.3%. Even during the fiscal year of 2022-23, males comprised 90.2% of total new enrolments, while women made up only 9.8%.
The complex interplay between economic growth, social security engagement, and workforce dynamics underscores the need for targeted policies. “While the economic landscape has witnessed impressive growth, persistent disparities and demographic trends necessitate nuanced strategies to bridge wealth gaps, enhance gender inclusivity, and optimize employment support programs for sustained economic well-being. India urgently needs to address the issues of low innovation, fewer female participation in the formal workforce, and poor quality of jobs if it wants to become a true economic powerhouse in the next few decades. A high GDP may make other countries envy India, but this jobless growth will certainly create discontent and dystopia within Indian society,” Chandra Shekhar, highlighted