Religious minorities face little bias in labour markets

by Mahesh Vyas

The Indian labour markets do not seem to discriminate on the basis of religion as much on other social cleavages. Labour market metrics of people of different faith differ, broadly on expected lines. But those differences are not as stark as they may be expected. They are also not worse than the differences based on other characteristics of identity.

The biggest disparity in the labour market is the one based on gender. The participation of women in the labour markets is very low compared to men and yet they face much higher unemployment rates compared to men. Labour participation rate (LPR) amongst males averages over 65 per cent but female LPR is less than 10 per cent. Unemployment rate (UER) amongst males is less than 7 per cent but female UER is nearly 15 per cent. This is a simple but clear evidence of significant discrimination against women.

There are differences across geographies. Traditionally, urban participation rates are low at less than 37 per cent and unemployment rates are high at over 8 per cent compared to rural regions where the LPR averages over 40 per cent and the UER is closer to 7 per cent. As a result, a larger proportion of the rural folks are employed than the townies.

There are differences between states as well. The north-eastern states, West Bengal, Telangana and Gujarat have high LPR ranging from 45 to 60 per cent while states along the Gangetic belt, Himachal Pradesh, Uttarakhand and Uttar Pradesh have LPR of less than 34 per cent.

Regional disparities are unlikely to be a cause of active discrimination against the regions. They could be more a case of the sustained neglect of the regions that naturally face adverse labour market conditions.

One fear that arises when examining the data is whether it will show us an ugly face of discrimination against people of different faith. In recent times, people of Islamic and Christian faith in India have come under pressure. Their places of worship have been under attack, their allegiance to the Indian nation has been questioned and the communities have been stereotyped. Acts that are perceived to threaten the lives, livelihood and freedom of Muslims and Christians seem to have sharpened since 2019. These include the revocation of Article 370 in October 2019 that gave the Muslim dominated erstwhile state of Jammu & Kashmir its special status, the Ram Janmabhoomi case in favour of the Ram temple in November 2019, the Citizenship Amendment Act and National Register of Citizens of December 2019, and the more recent questions disputing the validity of other large mosques.

It is moot therefore to assess whether Muslims and Christians have also faced adverse conditions in Indian labour markets compared to the majority faith the Hindus.

In 2017-18, India’s LPR was 43.7 per cent. Hindus had a slightly higher LPR of 43.9 per cent. The LPR of Muslims on the other hand was much lower at 41.9 per cent and that of Christians was much higher at 45.2 per cent. The LPR of Sikhs is a shade lower than that of the Hindus. Buddhists had, and continue to have, a very high LPR of nearly 47-48 per cent and Jains have a very low LPR of 35-38 per cent.

In spite of this prior differences and the increase in disparity over the past four years, the gap in LPR between people of different faiths is not as large as it is in the case of gender or states. It is comparable to the difference in LPR in urban and rural regions. And, Christians do quite well.

Since 2017-18, India’s LPR has declined to 40.1 per cent in 2021-22. It fell further to 39.7 per cent in the quarter ended June 2022 and then to 39.1 per cent in the quarter ended September 2022. The LPR fell by 3.62 percentage points between 2017-18 and 2021-22. The LPR for Hindus fell a tad more, by 3.64 percentage points. But, Muslims saw a fall of 3.92 percentage points and Christians saw a fall of 4.9 percentage points. Buddhists saw the smallest fall of only 0.84 percentage points. The major religious minorities Muslims and Christians have withdrawn from the labour markets more than the majority faith. But again, the difference is not alarming.

Muslims face a higher unemployment rate than Hindus. But, the difference is not very big. In 2017-18, Hindus faced an unemployment rate of 4.5 per cent when Muslims were at 5.3 per cent. In 2021-22, the unemployment rate for Hindus rose to 7.6 per cent while that for Muslims went up to 8.5 per cent. The difference was broadly the same. Christians have faced a lower unemployment rate 5.9 per cent in 2017-18 and a lower 5.4 per cent in 2021-22.

Muslims have the lowest employment rate. In 2021-22, only 34.7 per cent of the Muslims were employed. In contrast, 37.2 per cent of Hindus were employed and 38.1 per cent of Christians were employed. India’s employment rate is among the lowest in the world. Muslim Indians are in a worse spot. Only Jains beat them with an employment rate of less than 32 per cent.

It is quite possible that Muslim women and Jain women in particular are the ones who stay away from the labour markets. Gender is a greater discriminatory variable than religion. And, the apparent social and political pressures on minorities do not seem to have spilled over into religious identities.

Unemployment Rate (30-DAY MVG. AVG.)
Per cent
8.3 +0.7
Consumer Sentiments Index
Base September-December 2015
81.9 -0.2
Consumer Expectations Index
Base September-December 2015
81.6 0.0
Current Economic Conditions Index
Base September-December 2015
82.3 -0.6
Quarterly CapEx Aggregates
(Rs.trillion) Dec 21 Mar 22 Jun 22 Sep 22
New projects 4.04 8.60 4.88 3.53
Completed projects 2.86 1.32 1.18 1.33
Stalled projects 0.08 0.43 0.53 0.06
Revived projects 1.98 0.33 0.29 0.09
Implementation stalled projects 0.66 0.09 0.29 0.26
Updated on: 08 Dec 2022 8:28PM
Quarterly Financials of Listed Companies
(% change) Dec 21 Mar 22 Jun 22 Sep 22
All listed Companies
 Income 23.4 20.8 40.1 25.1
 Expenses 21.3 19.8 41.4 27.1
 Net profit 35.4 31.3 21.1 -3.0
 PAT margin (%) 9.0 8.8 7.2 7.7
 Count of Cos. 4,756 4,671 4,683 4,494
Non-financial Companies
 Income 29.3 24.8 50.1 27.8
 Expenses 28.8 25.7 52.9 31.5
 Net profit 19.2 9.8 8.3 -22.6
 PAT margin (%) 7.5 7.6 5.7 5.5
 Net fixed assets 2.0 3.9
 Current assets 15.0 19.3
 Current liabilities 11.7 10.8
 Borrowings 3.6 11.8
 Reserves & surplus 11.3 7.6
 Count of Cos. 3,439 3,387 3,414 3,330
Numbers are net of P&E
Updated on: 08 Dec 2022 8:28PM
Annual Financials of All Companies
(% change) FY20 FY21 FY22
All Companies
 Income 0.6 -0.9 25.8
 Expenses 0.4 -3.2 24.7
 Net profit -3.8 75.0 61.6
 PAT margin (%) 2.0 4.3 7.9
 Assets 9.0 9.9 9.9
 Net worth 4.7 12.0 14.2
 RONW (%) 3.4 6.8 11.8
 Count of Cos. 33,421 32,202 9,171
Non-financial Companies
 Income -1.1 -1.9 31.7
 Expenses -0.9 -3.9 31.5
 Net profit -20.4 62.2 60.2
 PAT margin (%) 2.2 3.9 6.9
 Net fixed assets 11.3 2.2 2.3
 Net worth 2.1 10.5 14.8
 RONW (%) 4.6 7.5 13.3
 Debt / Equity (times) 1.2 1.0 0.7
 Interest cover (times) 1.9 2.4 4.3
 Net working capital cycle (days) 82 88 55
 Count of Cos. 26,380 25,257 6,870
Numbers are net of P&E
Updated on: 05 Dec 2022 10:11AM