What the PLFS numbers reveal
Latest data on India’s labour market has key political ramifications ahead of 2024 elections
Headline numbers from the 2022 Periodic Labour Force Survey (PLFS) released last week are a shot in the arm for the Bharatiya Janata Party (BJP) and its narrative of effective governance, and will likely form a key prong of its re-election plank in the 2024 Lok Sabha polls. The jobs data affirmed the story of India’s economic recovery from the pandemic trough and held out the following takeaways. One, the annual unemployment rate in 2021-22 of 4.1% was the lowest since the first PLFS report for 2017-18 was released, indicating that the distress in the labour markets had dissipated. Two, the labour force participation rate, which measures the share of the working-age population working or looking for work, has fallen marginally between 2020-21 and 2021-22, and is still higher than the levels seen in pre-pandemic PLFS rounds. This means the decline in the unemployment rate is not driven by a large number of people dropping out of the job market. And three, the decline in the share of agriculture indicates that some migrants who came back to their villages during the lockdowns may have gone back to the cities and found employment.
The numbers show that labour markets have recovered; this will cheer up the government, who will no doubt work up plans to campaign on the basis of its pandemic governance strategy in crucial state elections later this year, and the 2024 battle. Foreign policy achievements will be one prong of the election campaign, and if the PLFS numbers hold, the state of the economy will be the second. The unemployment number has been a political bellwether in the past, and the dip will help the BJP, which was stitching together a narrative of growth.
Does this mean the Opposition’s path to create an economic platform is blocked? Not quite. A year remains till the 2024 campaign and the government will have to weather the vagaries of climate crisis-induced crop yield shocks, the unpredictable monsoon and global headwinds. Economists have also predicted that a rural recovery may drive the next phase of inflation, which is proving far stickier than predicted. Add to this the fact that PLFS hints that the quality of jobs continues to be suspect and the share of family-based work remains high, and it is clear that the space to build a political platform is present. Elections are as much about facts, as they are about narratives. In 2024, this will be even truer for a generation of people who reached adulthood in the National Democratic Alliance era. The jobs data sketches the contours of the BJP’s economic argument. The Opposition has its task cut out for it.