Employment growth rate accelerates to 6% in FY24: RBI

New Delhi: Nearly 4.67 crore new jobs were created in India during the financial year 2023-24 taking the total number of employed persons in the country to 64.33 crore, data by the Reserve Bank of India (RBI) data showed on Monday.

As per the RBI’s KLEMS data, the growth rate of new job creation in India accelerated to 6 per cent in FY24 from 3.2 per cent recorded in the previous year. The central bank’s KLEMS data measures industry level productivity and employment. KLEMS is an acronym of K (capital), L (labour), E (energy), M (material) and S (services), all key inputs and sources of economic activities and growth.

While this data is a routine release, the RBI on Monday for the first time released a “provisional estimate of productivity for the total economy”. The RBI uses data from the National Accounts and the Ministry of Labour and Employment to extrapolate the KLEMS data.

Meanwhile, in a separate statement, the union Ministry of Labour & Employment claimed that over 8 crore new employment opportunities were created in the country in four years from fiscal years 2017-18 to 2021-22.

This translates to an average of over 2 crore employment opportunities per year, despite of the fact that the world economy was hit by Covid-19 pandemic during 2020-21 which contradicts an assertion by Citigroup of India’s inability to generate sufficient employment, the ministry said in a rebuttal to a research report by the bank.

In a report released last week, Citigroup said that India would not be able to create sufficient jobs with 7 per cent GDP growth. According to the report, India will be able to create only 8-9 million (80 to 90 lakh) jobs a year at that growth rate against the requirement of 11-12 million.

Countering the report’s data, the ministry said, “Reliance on such private data sources over official statistics can lead to misleading conclusions and thus, should be used with caution.”

Referring to the data from National Pension System (NPS), the ministry claimed that more than 7.75 lakh new subscribers joined the NPS during 2023-24 under the centre and states, which is 30 per cent more than 5.94 lakh new subscribers during 2022-23. “This substantial increase in new subscribers highlights the government’s proactive measures to fill-up the vacancies in the public sector in a timely manner,” the ministry said.

It further added that as per PLFS data, during the last 5 years, more employment opportunities have been generated compared to the number of people joining the labour force, resulting in a consistent reduction in the unemployment rate.

“This is a clear indicator of the positive impact of government policies on employment. Contrary to the report, which suggests a dire employment scenario, the official data reveals a more optimistic picture of the Indian job market,” the ministry said.

As per PLFS data, from 2017-18 to 2022-23, Worker Population Ratio (WPR) increased from 46.8 per cent to 56 per cent, labour force participation rate rose from 49.8 per cent to 57.9 per cent, and the unemployment rate for persons of age 15 years and above declined from 6 per cent to 3.2 per cent.