Whalesbook
HDFC Bank's 'Employment Trends in India' report reveals self-employment is India's primary job growth driver, growing at a 7.0% CAGR from FY18 to FY24. This category surged from 239 million to 358 million, significantly outperforming salaried jobs (4.1% CAGR) and casual labour (1.1% CAGR). The report also highlights a robust increase in the Labour Force Participation Rate to 64.3%, with substantial employment gains driven by women, who added 103 million jobs. Non-farm sectors like services, construction, and manufacturing, alongside MSMEs, are key contributors to this expansion.
HDFC Bank's recent 'Employment Trends in India' report identifies self-employment as the leading force behind India's job market expansion over the past six years (FY18-FY24). The number of self-employed individuals (including farm and non-farm) grew from 239 million to 358 million, achieving a healthy Compound Annual Growth Rate (CAGR) of 7.0%. This pace significantly outstrips the growth in other employment categories. Salaried or regular wage jobs saw a more modest increase, rising from 105 million to 119 million at a CAGR of 4.1%. Casual labour remained largely stagnant, growing from 114 million to 122 million with a CAGR of just 1.1%.
The report also points to a substantial rise in overall labour market participation. The Labour Force Participation Rate (LFPR) for the working-age population (15-59 years) increased from 53% in FY18 to 64.3% in FY24. Notably, women's participation has seen significant growth, reaching 31.7% in FY24. This surge in employment was largely driven by women, who accounted for 103 million of the total 155 million new jobs created between FY18 and FY24, nearly double the addition of male workers (52 million).
The non-farm sector now accounts for 54% of total employment, with services, construction, and manufacturing being the main job creators. Services alone added 41 million jobs, driven by wholesale and retail trade, transport, and education. Manufacturing jobs grew by 15 million, with textiles and apparel being significant contributors. Micro, Small, and Medium Enterprises (MSMEs) play a crucial role, forming a substantial part of employment in both manufacturing and services.
Impact:
This news indicates a significant structural shift in India's economy, emphasizing entrepreneurship and self-driven economic activity. For investors, it highlights potential growth areas in sectors supporting self-employment, such as financial services for MSMEs, retail, logistics, and manufacturing sub-sectors like textiles. The increasing participation of women and youth in the labour force suggests evolving consumer demographics and demand patterns. It also underscores the importance of policy focus on fostering an environment conducive to self-employment and MSME growth.
Rating: 7/10
Difficult Terms:
CAGR (Compound Annual Growth Rate): This is the average annual rate at which an investment or business metric has grown over a specified period longer than one year.
LFPR (Labour Force Participation Rate): The percentage of the working-age population that is either employed or actively seeking employment.
MSMEs (Micro, Small, and Medium Enterprises): Businesses classified by size based on investment and turnover, playing a vital role in job creation and economic development.
Non-farm sector: Economic activities that are not related to agriculture, including manufacturing, services, construction, and trade.
