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2 Crore Women in India Quit Workforce in 2017-22

More than 50% of Indians of legal working age don’t want a job due to the lack of suitable employment: CMIE
2 Crore Women in India Quit Workforce in 2017-22

Representational Image. Image Courtesy: Reuters

More than 50% of the 90 crore Indians of legal working age, particularly women, don’t want a job due to increasing frustration of not finding the right kind of employment. The shocking data was reported by the Centre for Monitoring Indian Economy (CMIE), a private research firm in Mumbai.

Between 2017 and 2022, about 2 crore women disappeared from the workforce, leaving only 9% of the eligible population employed or looking for positions, Bloomberg reported mentioning the CMIE data. In the same period, the overall labour rate dropped from 46% to 40%.

The figures come at a time when India is betting on its young labour force, which is increasingly getting frustrated due to the lack of opportunities. Though earlier CMIE data showed that the unemployment rate had dipped to 7.6% in March from 8.10% in February, considering the massive numbers of Indians of legal working age, the percentage is very high.

Haryana had recorded the highest unemployment rate in March at 26.7%, followed by Rajasthan and Jammu and Kashmir at 25% each, Bihar at 14.4%, Tripura at 14.1% and West Bengal at 5.6%.

The latest CMIE data shows how the problem of job creation, especially considering the rise in the number of women quitting the labour force, is transforming into greater danger. Despite representing 49% of the population, women contribute only 18% to the economic output, which is about half the global average.

Women do not join the labour force in as many numbers because jobs are often not kind to them,” Mahesh Vyas of CMIE told Bloomberg. “For example, men are willing to change trains to reach their job; women are less likely to be willing to do that. This is happening on a very large scale.”

A joint report of the Centre for Economic Data and Analysis and CMIE titled ‘India’s shrinking female workforce’ in January comparing the pre-COVID-19 and post-pandemic levels showed that the national average monthly employment of women in 2021 was 6.4% lower than in 2019.

There was also a sharp decline in average monthly employment of women in urban areas with 22.1% fewer women employed compared to 2019. Fewer women actively looked for jobs in 2021 as compared to both 2019 and 2020 with the decline sharper in the latter, the report had stated.

Four states saw a more than 50% decline in average monthly female employment in 2021 compared to 2019—Tamil Nadu (-50.9), Goa (-56%), Jammu and Kashmir (then a state, -61%) and Punjab (-57.9%).

India’s average monthly female employment in 2021 was 4.9% more than in 2020 but 6.4% less than in 2019. The difference was more in urban and rural areas. Average female employment in urban India in 2021 was 6.9% lower than in 2020 and 22.1% lower than the pre-pandemic year of 2019. In rural India, however, female employment in 2021 was 9.2% higher than in 2020 and only 0.1% lower than in 2019, the January report showed.

Urban India had 22.1% fewer women employed in 2021 as compared to 2019. Besides, fewer women were actively looking for jobs in 2021. While around 95 lakh women actively searched for jobs every month in 2019, the number declined to 83 lakh in 2020 and only 6.52 million in 2021. This trend was observed in both urban and rural India.

The Periodic Labour Force Survey for 2017-18 released in June 2019 revealed a striking decline in women’s participation in the workforce. Only about 22% of women of working age (defined as 15 years of age or more) were gainfully employed down from about 31% in 2011-12, as estimated by the 68th Round of National Sample Survey Organisation survey.

A State Bank of India report in March stated that the Centre’s plan to increase the minimum marriage age for women to 21 years could motivate them more to join the workforce as they could opt for higher education and a career.

We believe increasing the legal age has the potential to reduce India’s MMR (Maternal Mortality Rate) and will lead to more females doing graduation and hence coming into the labour force. Another benefit is legal marriage age will become the same for men and women,” SBI Ecowrap said.

While the number of eligible job seekers is increasing rapidly, the Narendra Modi government has failed to provide adequate employment. According to a 2020 report by McKinsey Global Institute, India needs to create, at least, 9 crore non-farm jobs by 2030, requiring an annual GDP growth of 8%-8.5%.

The large share of discouraged workers suggests that India is unlikely to reap the dividend that its young population has to offer,” said Kunal Kundu, an economist with Societe Generale GSC Pvt, in Bengaluru. “India will likely remain in a middle-income trap with the K-shaped growth path further fuelling inequality.”

According to earlier CMIE data, in the past three years, the urban unemployment rate has been hovering at about 8%. It shot up to a whopping 25% during the ill-conceived first lockdown in April-May 2020. Then it came down a bit only to go up again in May 2021 to nearly 15% during the deadly second wave of COVID-19 and the accompanying restrictions. Again, it came down after the restrictions were eased. But when it comes down, it stays at around 8% or more.

According to CMIE estimates, in January 2019, the total number of persons employed in urban India was 12.84 crore. This has declined to 12.47 crore at the beginning of December 2021. In other words, even as the population has grown (and so has the working-age population), there is an absolute decline of about 37 lakh employed people in urban areas.

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