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More rural youth withdrew from labour market in FY19 as economy slowed down

Labour force participation rate (LFPR) or people working or looking for jobs for the rural youth within the age group of 15-29 years declined to 37.8% in FY19, according to the latest period labour force survey

More rural youth withdrew from the labour market in FY19 compared to the preceding year, confirming intensifying rural distress well before the pandemic hit the economy.

According to the latest period labour force survey released by the statistics department, labour force participation rate (LFPR) or people working or looking for jobs for the rural youth within the age group of 15-29 years declined to 37.8% in FY19 from 38.1% a year ago when measured through the usual status. However, for the urban youth, LFPR increased marginally to 38.7% in FY19 from 38.5% in FY18.

Among rural youth, LFPR for both male and female persons declined in FY19 while among urban youth, LFPR for females declined while it increased for their male counterparts during the same year.

For a developing country like India, LFPR is considered to be a better metric to analyse labour market trends rather than unemployment rate which is the percentage of the labour force currently unable to find any job.

The Indian economy slowed down to grow at 6.1% in FY19 against 7% in the previous year. It has further decelerated to 4.2% in FY20 and is projected to face its worst recession contracting at least by 5% in FY21 as mobility restrictions and downbeat consumer sentiment due to the coronavirus pandemic has badly affected consumer demand.

PLFS was launched with the objective of measuring employment every three months in urban areas and once a year in both rural and urban areas. The quarterly survey only captures data classed as current weekly status (CWS), while the annual survey measures both the usual status and CWS. However, the statistics department has not been regularly releasing the quarterly surveys.

A person who is unable to get work for even an hour in the last seven days despite seeking employment is considered unemployed under CWS. Under usual status, the employment activity of a person is determined on the basis of a reference period of 365 days preceding the date of the survey.

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