More women exiting work force in India; increasing number of people frustrated, not even looking for job

A growing number of people, particularly women, are no longer even looking for work in India, according to new data from the Centre for Monitoring Indian Economy Pvt, a private research firm in Mumbai. They are reportedly frustrated at not being able to find the right kind of job.

Between 2017 and 2022, the overall labour participation rate dropped to 40% from 46%. Among women, the data is even starker. About 2.1 crore (21 million) disappeared from the workforce, leaving only 9% of the eligible population employed or looking for positions. This situation is ominous for a country like India, which is betting on young workers to drive economic growth.

According to the CMIE, more than half of the 90 crore (900 million) Indians of legal working age - roughly the population of the US and Russia combined - don't want a job. According to a Bloomberg report, an economist with Societe Generale GSC Pvt in Bengaluru, Kunal Kundu has been quoted as saying that the large share of discouraged workers imply that India will not be able to reap the demographic dividend. This would mean that India would remain in the middle-income trap, with the K-shaped growth path further fueling inequality.

For women, the reasons sometimes relate to safety or time-consuming responsibilities at home. Though they represent 49% of India's population, women contribute only 18% of its economic output, about half the global average.

"Women do not join the labour force in as many numbers because jobs are often not kind to them," said Mahesh Vyas of CMIE. "For example, men are willing to change trains to reach their job. Women are less likely to be willing to do that. This is happening on a very large scale."

Though Prime Minister Narendra Modi has promised “amrit kaal,” or a golden era of growth, his administration has made limited progress in solving impossible demographic math. India needs to create at least 9 crore (90 million) new non-farm jobs by 2030, according to a 2020 report by McKinsey Global Institute. That would require an annual GDP growth of 8% to 8.5%. Failing to put young people to work could push India off the road to developed-country status. With about two-thirds of the population between the ages of 15 and 64, competition for anything beyond menial labor is fierce.

The decline in labour began before the pandemic. In 2016, after the government banned most currency notes in an attempt to stamp out black money, the economy sputtered. The roll-out of a nationwide sales tax around the same time posed another challenge. India has struggled to adapt to the transition from an informal to formal economy.