India witnessed an impressive surge in job creation in the financial year 2023-24 (FY24), adding 2.5 times more jobs than the previous year. This remarkable achievement is highlighted by the provisional data released by the Reserve Bank of India (RBI) on July 8, indicating a significant milestone in the nation’s employment landscape.
The total additions to the workforce stood at 46.7 million in FY24, marking the highest job growth since 1981-82. This represents a growth rate of 6 percent, surpassing the employment growth rates of the past three decades. This surge occurred despite the fact that the output growth was only marginally higher, at 6.7 percent in FY24, compared to 6.6 percent in the previous year.
The RBI’s KLEMS (Capital, Labour, Energy, Materials, and Services) database, which utilizes the government’s periodic labour force survey (PLFS) to calculate employment numbers, provided these insights. According to the latest PLFS data for 2022-23, India’s unemployment rate fell to its lowest level of 3.2 per cent, a significant drop from 6.1 per cent in 2017-18. The PLFS data is calculated for the July-June period.
By the end of FY24, the number of employed people in India reached 643.3 million, up from 597 million in the previous year. This growth is notable as the last time India added over 40 million jobs was in FY20, even when output growth had declined from 5.7 percent to 4.1 percent.
Government data released last month highlighted that over 31 million people entered the formal workforce for the first time in FY24. Of these, 21 million joined the Employees’ State Insurance Corporation, while another 10 million enrolled in the Employees’ Provident Fund Scheme. This surge in formal employment signifies a positive shift towards structured employment opportunities.
A detailed analysis of the 2022-23 data shows that three out of five jobs added were in agriculture, construction, and other services sectors. Agriculture alone accounted for 42.4 percent of the country’s total employment, while the construction sector employed another 12.5 percent. Trade contributed to about 10 percent of the new job additions.
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