India’s Job Quality Declines as More Turn to Self-Employment, Says Survey - All You Have To Know

According to labor economist Santosh Mehrotra, the rise in self-employment is driven mainly by agriculture, where many workers, particularly women, are involved in unpaid family work. Nearly a fifth of employed people in India fall under this category, and it accounts for about a third of the self-employed.All

By Aayushi Dubey Sep 28, 2024, 17:22 IST

A recent government survey, PLFS 2023-24, has raised concerns about a decline in job quality in India, even though the unemployment rate remains steady at 3.2%. The survey shows stagnation in manufacturing jobs and an increase in participation in low-earning agricultural jobs, especially in the form of unpaid family labor.

According to labor economist Santosh Mehrotra, the rise in self-employment is driven mainly by agriculture, where many workers, particularly women, are involved in unpaid family work. Nearly a fifth of employed people in India fall under this category, and it accounts for about a third of the self-employed. The International Labour Organization does not recognize unpaid family labor as formal employment.

The PLFS report also highlights that the share of people working in agriculture increased slightly from 45.8% in 2022-23 to 46.1% in 2023-24, marking a reversal of the trend that had been in place before 2019. The survey also shows that 58.4% of the workforce is now classified as self-employed, up from 57.3% the previous year.

While the Worker-Population Ratio (the percentage of employed people in the population) has risen from 56% to 58.2%, much of the increase is due to unpaid work. This is particularly concerning for rural women, whose involvement in agriculture and self-employment in family enterprises has been increasing over the past four years.

Mehrotra explained that three key policy shocks—demonetization in 2016, the unplanned GST implementation in 2017, and the Covid-19 lockdown—have led to the decline of non-farm jobs and a surge in agricultural employment.

The government has introduced production-linked incentive schemes to boost jobs, but according to Mehrotra, these efforts have failed to significantly create employment. The MSME sector, which traditionally generates jobs, has been hit hard by these policy changes.

In conclusion, while the unemployment rate remains stable, the quality of jobs in India appears to be declining, with more people turning to self-employment and unpaid family labor.

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