India’s unemployment is at a record low driven by self-entrepreneurship at all levels and higher emphasis on higher education, SBI Research said in a report on Tuesday.
India’s labour market is undergoing a deep structural transformation as more people opt for entrepreneurship with higher education as key enabler, according to the report.
The recently released sixth annual Periodic Labour Force Survey report from the National Sample Survey Office also reveals a significant decline in unemployment rate from 6.1% in FY18 to 3.2% in FY23, it said.
This has come along with an increase in Labour Force Participation Rate from 36.9% to 42.4%, as Female Labour Force Participation Rate far outstripped overall gain, according to the report.
The higher levels of self-entrepreneurship were attributed to the rising share of household helpers.
Government schemes to promote entrepreneurship through Mudra Yojana and small credit for small vendors is leading to formalisation of credit at the bottom of the pyramid.
It is heartening that the family enterprises are getting bigger and this is getting reflected through a rise in household helpers, the report said.
The paper acknowledged that unemployment is always a contentious and political issue, more so for developing economies with a plethora of misplaced and ignorant data interpretations in public domain, some political, some economic and laced with old-fashioned rhetoric.
On the unemployment rate of youth (between the age group 15 years and 29 years), the report said, even though the PLFS survey showed a decline from 12.9% to 10% for the three-year period ended FY23, it is still cited wrongfully as a proxy for shrinking unemployment opportunities.
However, while there is a lot of noise about it being a barometer of serious youth unemployment, “we believe it is truly a reflection of changing employment-education pattern, with the men/women remaining in the education system at least until the age of 23-24 years, which used to be only up to 17 years earlier”, it said.