8 highlights
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India is a 40% economy. Only 4 out of every 10 Indians find work. That means 840 million Indians are not doing work that is counted as economic activity. Of course, you need to allow for children, who should be in school, perhaps for the elderly.
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The international measure, the Labour Force Participation Rate (LFPR), is the percentage of those above 15 who are employed. In 2019, the International Labour Organisation (ILO) estimated our LFPR at 51.91%.
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In his book, ‘1232 kms.’, which reads like a gritty adventure novel, Vinod Kapri followed a group of Bihar villagers who cycled home from Delhi, rather than become destitutes in its grotty suburbs.
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For most Indians, the definition of employment is very loose; even outside of agriculture, only 30% of employment is in the formal sector.
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The design of our Periodic Labour Force Surveys (PLFS) makes room for the tenuous nature of work. Surveyors ask for your Usual Status (US). Then, they check your Current Working Status (CWS) - whether you have worked 1 hour or more in the last 7 days. On average, there are 20 million Indians who are ‘usually employed’, but haven’t worked even 1 hour in the last week.
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I have one question though: It makes sense for the US to import goods from China, in effect exporting factory jobs to a country with much lower wages. But how did we end up doing the same thing, when our factory wages are less than one-third of China’s?
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Daily MNREGA wages are lagging behind the minimum wage. In the poorest states of the country, Bihar and UP, families registered for the scheme get barely 10 days of employment a year.
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For Indian investors, IT stocks have an additional buffer, as global shocks tend to lower the value of the rupee, and buoy earnings of our software exporters.