India may weather slowdown better than most: ILO

The International Labour Organisation (ILO) believes India is likely to weather the latest global slowdown better than most countries, provided it ensures rising income levels for the working class and enough jobs for a growing working-age population.

According to the annual report on global employment by the ILO, "The main challenge is not unemployment, but rather the high degree of informality that persists despite strong growth."

"The robust growth witnessed in the South Asian region was driven largely by India and was largely due to the rapid rise in labour productivity, rather than an expansion in employment," the report, titled, 'Global Employment Trends 2012: Preventing a Deeper Jobs Crisis', said.

This situation is prominent in India, which accounts for 74% of the South Asia region's labour force.

In India, total employment grew by only 0.1% over the five years to 2009-10 -- from 457.9 million in 2004-05 to 458.4 million in 2009-10 -- while labour productivity grew by more than 34% over this period.

Labour productivity is the amount of goods and services that a worker produces in a given amount of time.

A major reason for the slow growth in employment in recent years is the fall in female participation in the labour force. This has been most pronounced in India, where participation of women in labour activities fell from 49.4% in 2004-05 to 37.8% in 2009-10 for rural females and from 24.4% to 19.4% for urban females.

This drop in participation can only partly be explained by the strong increase in enrollment in education, because it has been evident across all age groups, the report added.