Union Ministry Of Labour Still Peddling False Narrative On Joblessness In India

It is ridiculous. Union Government of India is still hiding behind a questionable extrapolation on employment based on Reserve Bank of India’s KLEMS (Capital, Labour, Energy, Materials, and services) database, and informed the Lok Sabha on July 24 that India added 17 crore jobs between 2017-18 and 2023-24.

The Centre led by Prime Minister Narendra Modi has been peddling this false narrative right from the Lok Sabha election campaign in 2024, which is still going on. The Union Minister of State for Labour and Employment Shobha Karandlaje in a written reply has provided a camouflage of data based on KLEMS, Union Government’s PLFS data, and ILO outlook of 2024 and claimed that those data indicated “improvements signalling higher engagement of the working-age population in productive employment” rejecting claims of joblessness, especially among India’s youth.

The reply of the Union Ministry of Labour and Employment has come just a day after it had rebutted a media report questioning the credibility of India’s unemployment figures. The ministry had defended its Periodic Labour Force Survey (PLFS) calling it “globally recognized” and aligned with international standards such as those set by the International Labour Organization (ILO).

It is to be noted here, that PLFS has recently transitioned into a new methodology and periodicity, and has started monthly reports on employment and unemployment since April 2025, the first report of which came in May. It included both rural and urban data. PLFS has replaced the old Labour Survey on Employment and Unemployment since 2017-18, and has started giving yearly data for rural areas and quarterly data for urban areas with a delay of at least three months. The new methodology of PLFS has warned that it is not comparable with the old data. Nevertheless, the Minister has compared the old PLFS data and the new PLFS data.

In absence of the realtime data from the government, people had to depend on the private data, such as one from the Centre for Monitoring Indian Economy (CMIE). The unemployment data from CMIE has been always much above the official PLFS data. Government has been campaigning against the private data and urging people not to believe them. They have urged the people to believe on official PLFS data, the reliability of which has always been questioned and considered stale.

Irony is that the Union government, including the Prime Minister Narendra Modi did not believe the PLFS data, and therefore they have been relentlessly quoting the extrapolated data from the RBI’s KLEMS database. They why should people believe the PLFS data?

The new monthly PLFS data on employment and unemployment is also not generally believed, both by the common people and experts.

Only a few days ago the Reuters poll of independent economists has said that the Indian government’s data is inaccurate and masks the severity of joblessness and underemployment. Several of the experts said that the true jobless rate is around twice the official figure. Over 70 per cent of independent economists polled, 37 out of 50, said that the official unemployment rate at 5.6 per cent in June, is inaccurate.

It was on this report, the Union Ministry of Labour and Employment, said on July 23 that Reuters poll relied on “unverifiable perceptions” adding that while “expert opinion can offer valuable insights, it cannot be a substitute for large-scale, representative, and methodologically robust surveys.”

In the parliament, the Union Ministry of Labour and Employment has said, that the number of employed people in the country rose to 64.33 crore in 2023-24 from 47.5 crore in 2017-18. Since it is based on extrapolation from the RBI’s KLEMS data, it is worth visiting the KLEMS data to know the falsehood that is being played though the false narrative of the government. Earlier, government has given this data even in the Rajya Sabha.

First thing to note the Government’s official PLFS data does not given the employment figures at the level of the extrapolation from the RBI’s KLEMS data. It is the reason because of which Centre has been repeatedly quoting KLEMS to show high employment figures, while PLFS shows low employment figures.

RBI’s data shows that in 2014- 15 we had 471.46 million employed persons, which rose to 472.04 million in 2015-16. For the year 2016-17, when millions of MSMEs were closed and most of them reduced their operation up to 75 per cent after the demonization in November 2016, and millions of workers lost their jobs, the RBI data showed 1.2 per cent increase in employment which increased to 473.2 million.

For the year, 2017-18, when even NSSO data showed 45 years high unemployment rate at 6.1 per cent, the RBI data showed that employment increased by 1.8 per cent to 475 million. For the year 2018-19, RBI data on employment showed a jump of 17.6 per cent to 492.6 million. In 2019-20, RBI data showed a jump in employment be 41.8 per cent that rose to 534.4 million.

The more mysterious RBI data came for 2020-21, the year of the lockdown and COVID-19 crisis when the entire economy came to a halt. RBI data said that employment jumped to 31.2 per cent for that year and it reached to 565.6 million. The next COVID-19 crisis year was 2021-22, and the RBI data showed 11.9 per cent jump in employment which reached to 577.5 million. It should be noted that when India’s GDP growth rate turned negative about (-6 per cent) in 2020-21 due to lockdown of the economy, RBI’s data show jump in employment. For 2022-23 the data showed 19.2 per cent jump to 596.7 million, and for 2023-24 the jump was 46.7 per cent to 643.3 million.

It is strange that the Union Government still quoting this RBI data which are questionable. The reality is that government employment data is inflated. Unpaid household helpers are counted as employed, and also persons who got 1 hour of work. Own account workers, that are self-employed, are on the rise, and earning very low below the survival level. About 90 per cent of the employment are informal, and lack social security. Underemployment is rampant.

The Union Minister of State for Labour and employment has given the record employment figure from RBI’s data base for the year 2023-24.However, PLFS data shows that a total of 58.4 per cent of the total employed people in 2023-24 were self-employed. The percentage of self employed has risen from 55.8 per cent in 2021-22 and 57.3 per cent in 2022-23. It is indicative of the declining job opportunities in the labour market which enforcing people to become either helping hand in household enterprises or own account worker so that they can survive amidst lack of social security coverage. Regular wage and salaried jobs have been almost stagnant, the PLFS 2023-24 shows. It was 21.5 per cent in 2021-22, declined to 20.9 per cent in 2022- 23, and reached 21.7 per cent in 2023-24. Share of casual labour in the work force was also declining which was 19.8 per cent in 2023- 24, but was 21.8 per cent in 2022- 23 and 22.7 per cent in 2021-22. (IPA Service)