Centre For Monitoring Indian Economy (CMIE) data suggested that labour participation rate (LPR) declined from 40.1 per cent in financial year 2022 to 39.5 per cent in financial year 2023. According to CMIE analysis, India’s LPR is one of the lowest compared to global estimate of 60 per cent. The data cited by the analysis suggested that around 90 per cent of women in their working age are out of India’s labour force.
According to the definition of LPR, it refers to share of working age population which is either employed or unemployed, looking for employment. The LPR of Indonesia is 67 per cent and it is around 63-64 per cent for countries like South Korea and Brazil. Compared to these countries, India’s LPR is lagging behind with quite a margin.
Advertisement
CMIE analysis said that the low participation rate is a worrying sign as a large share of population has dropped out of the workforce and isn’t willing to seek employment. The data showed that LPR in India has declined in India from 2016-17. In that year, the LPR was recorded at 46.2 per cent which has now declined to 39.5 per cent.
A sharp decline in Indian workforce was seen during the pandemic when the workforce declined from 442 million in 2019-20 to 424 million in 2020-21. This recovered to 439 million in 2022-23 but was still lower than the pre-pandemic level. One of the largest decline has been of female workers whose share has fallen from 15 per cent in 2016-17 to 8.8 per cent in 2022-23.
