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Employment growth rate rose to 6 per cent in FY24 against 3.2 per cent in FY23, according to RBI’s KLEMS database.
This growth in employment comes in the backdrop of India’s real GDP rising by 8.2 per cent in FY24, up from 7 per cent in the previous year.
Madan Sabnavis, Chief Economist, Bank of Baroda, said: “The improvement in terms of employment growth rate is significant...This is a positive sign that employment is growing. Now, we will have to wait for a couple of months for company annual reports to see if headcount has increased at a steady rate or not.
“Last year was a good year for the economy. I am sure we will grow above 7 per cent this year. This means things will be satisfactory.”
The Reserve Bank of India on Monday released an update on “Measuring Productivity at the Industry Level-The India KLEMS [Capital (K), Labour (L), Energy (E), Material (M) and Services (S)] Database” comprising the Data Manual 2024 and time-series data on productivity for 27 industries covering the period 1980-81 to 2022-23.
20-month low
As per the data from the Centre for Monitoring Indian Economy (CMIE), the all-India unemployment rate (UR) declined to a 20-month low of 7 per cent, driven by lower UR in rural areas, per RBI’s latest monthly bulletin.
The labour participation rate (LPR) recorded a marginal decline while the employment rate (ER) increased vis-à-vis the preceding month, leading to the lower unemployment rate, it added.
The bulleting noted that in May 2024, organised manufacturing employment recorded the fastest expansion in 18 months, driven by new orders and favourable demand expectations as captured by the purchasing managers index (PMI) employment outlook.
Services job creation expanded to its strongest since August 2022, led by robust increase in new business segment
“The household work demand under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) witnessed an increase of 26.4 per cent (month-on-month) in May, reflecting the seasonal pattern in agricultural production.
“MGNREGA employment, however, declined by 14.3 per cent on a year-on-year basis in May 2024,” RBI said.
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