A survey by ASSOCHAM and National Institute of Labour Economics Research & Development has found that India adds around 72 lakh members to its workforce every year, and the total work force will rise to 485.6 million by 2016-17 and to 495.1 million by 2019-20.
The survey also found that manufacturing, construction and services including transport, communication, hotels, education and real estate are the major creators of non-agricultural employment.
Importantly, about 37 million workers have left agriculture in India. “To sustain this transition, we need to create enough employment in the non-agriculture,” the ASSOCHAM-NILERD pointed out.
The size of labour force in India increased in a peculiar manner. During 1993-94 and 1999-00 it increased by 25.5 million with 5.25 million per annum. In the next 5 years from 1999-00 and 2004-5, it had shown a remarkable increase of 60 million with an increase of 12 million per annum.
However, in the last half of the decade post 2004-5, it did not increase at all and remained constant at 469.9 million. Surprisingly in the next two years, during 2009-10 to 2011-12, the labour force increased by 15 million to reach 484.8 million, thus a rise of 7.5 million per annum. The increase in the labour force size during 1999-00 and 2004-05 was mainly distress driven, with a rise in employment mainly in the low productive agriculture sector.
The stagnation of the labour force during 2004-05 to 2009-10 is due to the massive increase of education participation as well as the withdrawal of females from the labour force owing to mechanization in agriculture, increase in rural wages, thus raising the household income.
An average of 7.5 million increase in the labour force during 2009-10 to 2011-12 suggested the fact that those who were participating in education have begun to join the labour force. Keeping this in mind we have projected the total labour using their age, sex and education specific labour force participation rates.
“Given the estimates that about 2.5 million jobs would be available based on the 2011-12 economic scenario, additional 5 million jobs need to be created in non-agriculture to absorb the average of 7.2 million per annum increase of labour force,” the survey found.