India's Employment Sector Records Highest Growth Since 1981-82

India’s employment sector experienced robust growth in the fiscal year 2023-24, according to the Reserve Bank of India’s (RBI) latest data. The employment growth rate surged to 6%, a significant increase from 3.2% in the previous fiscal year. This marks the highest employment growth rate since the RBI began recording data in 1981-82.

In absolute terms, the Indian economy added 46.66 million jobs during the financial year ending in March 2024, bringing the total number of employed individuals to 643.35 million. This is more than double the 19.15 million jobs created in the previous fiscal year. The RBI’s updated data also revised previous years’ employment numbers upward, indicating a trend of stronger job creation.

The RBI’s provisional data release, part of its India KLEMS database, provided insights into productivity trends across various industries. It showed that total factor productivity growth, on a value-added basis, slowed to 2.0% in 2022-23 from 3.8% the previous year. This data highlights ongoing challenges in sustaining productivity growth.

India’s real GDP grew by 8.2% in the fiscal year 2023-24, up from 7% in the previous year, indicating a strong economic backdrop. The positive employment growth figures reflect improved labor market conditions amid broader economic expansion.

However, challenges remain. Recent reports suggest the need for sustained job creation to effectively absorb new entrants into the labor market. Despite positive trends in employment growth, concerns persist about the quality and sustainability of job creation, especially in the formal sector.

The RBI’s latest bulletin also noted a decline in the all-India unemployment rate to a 20-month low of 7%, driven by lower urban unemployment rates. The bulletin presented a mixed picture of labor market indicators, with a slight decline in labor participation rates but an increase in the employment rate compared to previous months.