Index of labour demand, supply in book of job soon

India is planning to develop an index that will map the demand and supply gap of workers in recognised occupations in every state.

The Ministry of Labour and Employment is developing the Occupational Shortage Index (OSI) in consultation with the International Labour Organization (ILO), a government official said. This is aimed at long-term labour market planning and development of policies to facilitate employment generation, he said. "We are looking to create an index that can provide a picture of demand and supply of workers in a particular occupation in each state," the official said.


The index, which will map the demand-supply gap for both white and blue-collar occupations, will help rank states on the robustness of their job market based on the identified parameters.


To begin with, mapping could be done for managerial positions, health professionals, cleaners and helpers. "More occupations will be added going forward to ensure that it reflects India's job market in totality," the official said.

The key parameters for the development of the index include wage pressure, employment pressure and talent pressure, with an increase or decrease in wages implying a shortage or excess of workforce.

Under the employment pressure parameter, the government will track any increase or decrease in the number of hours worked by individuals, which will imply a higher or lower demand for that particular occupation. The talent pressure parameter, meanwhile, will track the share of underqualified workers in an occupation, implying a shortage or excess of workforce in that job.

These sub-indicators are linearly combined based on the predefined weights to compute the Occupational Shortage Index. A high OSI will indicate a shortage or higher demand for workers within a particular occupation, which may result in higher wages and more job opportunities. A low OSI, on the other hand, will show a surplus or weak demand, which may lead to lower wages, fewer job opportunities and increased competition for the available positions.

All-round Approach
The government is of the view that the index will benefit all stakeholders including job seekers, employers, training institutions and policy makers to make informed decisions.


Jobseekers will be able to identify occupations having a high demand for as well as states with a strong demand for a given occupation, helping them do focused job searches and career planning.

The index will help employers prioritise hiring in occupations indicating shortage trends, while enabling them to attract talent in niche occupations by offering a better compensation. Training institutions will be able to customise courses according to the demand while undertaking reskilling and upskilling for the workforce engaged in low-demand jobs.

State governments can make targeted policy interventions to encourage creation of jobs based on the status of an occupation.

The labour ministry is using the periodic labour force survey data, conducted by the Ministry of Statistics and Programme Implementation, on employment and unemployment in India.