India's labour force participation shrank from 46 per cent in 2016-17 to 40 per cent in 2021-22, the Centre for Monitoring Indian Economy (CMIE) reported. In 2021-22, only 40 per cent of the country's legal working age were either employed or were actively looking for jobs, thus bringing the participation from 445 million in year-ending 2017 to 435 million in year-ending March 2022. Currently, about 1.085 million people in India above 15 years can be legally employed. Moreover, the participation rate among women was already at a double-digit low in 2017 and has declined further.
Urban Areas Saw A Higher Dip
While in 2016-17, about 15 per cent of women were either working or were looking for jobs, only 9.2 per cent are doing the same currently. Among men, the participation rate dipped from 74 per cent to 67 per cent, The Hindu reported. Interestingly, urban areas saw a higher dip in the participation rate than rural areas. The rate declined from 44.7 per cent to 37.5 per cent in urban areas compared to the decline from 46.9 per cent to 41.4 per cent in rural areas. Twenty-four states in India were assessed, and 23 saw a decrease in the labour force's participation. Apart from Rajasthan, all other states experienced a drop.
Southern states, which initially had a higher participation rate, saw the maximum drop. For instance, Andhra Pradesh and Tamil Nadu had a participation rate of 54 per cent and 56 per cent in 2016, and they also witnessed the sharpest decline. The falling labour force is a matter of concern for the Indian economy, expecting a recovery from the devastating impact of the global pandemic.
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