Information from the Center for Monitoring Indian Economy (CMIE jobs shows; that India’s labor force participation rate (LFPR) has tumbled to only 40% from a generally low 47% in 2016. This recommends not just that the greater part of India’s populace in the working-age bunch (15 years and more established) is choosing to sit out of the gig market. Yet additionally that the extent of individuals is expanding.
Prior to understanding LFPR, we want to characterize the actual workforce. As per the CMIE, the workforce comprises people who are old enough 15 years or more seasoned. Also, have a place with both of the accompanying two classifications: are jobless and will work and are effectively searching for a task. There is a pivotal shared characteristic between the two classifications: the two of them have individuals requesting positions.
In this way, the LFPR basically is the level of the working-age (15 years or more established) populace that is requesting a task; it addresses the interest for occupations in an economy.
It incorporates the people who are utilized and the individuals who are jobless. The Unemployment Rate (UER), which is regularly cited in the news, is only the quantity of jobless (classification 2) as an extent of the workforce.
What is the meaning of LFPR in India?
Normally, it is normal that the LFPR will remain to a great extent stable. In that capacity, any investigation of joblessness in an economy should be possible just by checking the UER out.
This, thus, influences the UER in light of the fact that LFPR is the base on which EUR is determined. The world’s LFPR is around 60%. In India, it has been sliding throughout the course of recent years and has contracted from 47% in 2016 to only 40% as of December 2021.