Why in the news?

• Recent Data from the Centre for Monitoring Indian Economy (CMIE) shows that India’s labour force participation rate (LFPR) has fallen to just 40% from an already low 47% in 2016.
• This suggests not only that more than half of India’s population in the working-age group (15 years and older) is deciding to sit out of the job market, but also that this proportion of people is increasing.

What is Labour Force Participation Rate?

• According to the CMIE, the labour force consists of persons who are of age 15 years or older, and belong to either of the following two categories:
  • are employed
  • are unemployed and are willing to work and are actively looking for a job.
• There is a crucial commonality between the two categories — they both have people “demanding” jobs.
• The Unemployment Rate (UER) is the number of unemployed as a proportion of the labour force.

What is the significance of LFPR in India?

• The world average of LFPR is around 60%. In India, it has been sliding over the last 10 years and has shrunk from 47% in 2016 to just 40% as of December 2021.

Why is India’s LFPR so low?

• The main reason for India’s LFPR being low is the abysmally low level of female LFPR. According to CMIE data, as of December 2021, while the male LFPR was 67.4%, the female LFPR was as low as 9.4%.
• In other words, less than one in 10 working-age women in India are even demanding work. Even if one sources data from the World Bank, India’s female labour force participation rate is around 25% when the global average is 47%.

Why do so few women demand work?

• Three primary reasons includes about the essentially about the working conditions — such as law and order, efficient public transportation, violence against women, societal norms etc — being far from conducive for women to seek work.
• Secondly, it’s about to do with correctly measuring women’s contribution to the economy. For example, Care Economy of women is not calculated
•  Lastly, it is also a question of adequate job opportunities for women.

Reference:

1. https://indianexpress.com/article/explained/unemployment-labour-force-participation-rate-india-economy-explained-7890638/