Mumbai: India has a range of indicators which throw significant light on India's employment scenario. Traditional indicators like participation rate, unemployment rate and worker population ratio are released in quarterly frequency. We also have a body of rich alternative data in the employment segment in India.
In a country with abundant labour, predominantly young working population and large informal sector, there is high importance of both traditional and alternative data for research and analysis purpose. In order to understand employment in India, CEIC offers a great mix of traditional and alternative indicators.
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Under formal employment markets, job postings data can be used to supplement the traditional indicators. The Naukri JobSpeak index and the Foundit Insights Tracker (formerly the Monster Employment Index) are both monthly indicators and richly supplement, as an indicator of the job market dynamism in India. Both are based on job listings for the white-collar hirings.
Traditional indicators like the participation rate point to an improvement since June 2022, reaching its highest in Q1 2023, at 38.1%. While the job postings data signal, a slight moderating job market since the beginning of 2023, which attributed to cyclicality. The Naukri JobSpeak Index, averaging around 2,900 between June 2022 and May 2023, remains, above the pre-pandemic levels. The Foundit Insights Tracker, on the other side, has moderated from 292 in February 2023, to 265 in May 2023.
India's job market also has a much bigger prevalence of informal jobs, which is measured by data from Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). It helps understand the direction of unskilled jobs market. Both work demand and employment generated under MGNREGS have been decreasing since June 2022.
Work demand has been experiencing annual declines since June 2021, with a 9.3% year-on-year drop in April 2023. On the other hand, employment generated, in the same month experienced a decline of 27.3% year-on-year. While the average national MGNREGS wage has steadily increased, the labour demand has remained muted, which can be attributed to better rewarding avenues of employment.
India is making progress towards the much-needed formalisation of its extensive labour market, as evidenced by MGNREGS data, available within CEIC. This popular social security program guarantees 100 days of unskilled manual work or equivalent pay to eligible rural households and played a crucial role in supporting vulnerable groups during the COVID-19 outbreak.
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The current moderation in work demand reaffirms that as the pandemic recedes, a significant portion of the rural population is returning to cities for work. This change can also be attributed to the government and private enterprises implementing various skilling programs, which are driving the formalisation of India's job market. Informal jobs currently account for the major section of total workforce, and increased formalisation will contribute to sustaining the economic growth.
About CEIC
CEIC is an ISI Emerging Markets' macroeconomic, industry and financial data platform that curates the highest quality and most timely economic data from traditional and high frequency alternative sources enabling economists and investment professionals to understand the development and near real time performance of the markets they cover.
Data is available for over 200 countries and territories but with a specific focus on emerging markets through deep country-specific databases. High frequency and alternative datasets supplement traditional data sources to provide early insight into what is happening now to facilitate the best possible investment and strategic decision-making for clients.
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