Even though employment growth in the formal private sector averaged 1.3 per cent a year in the 1990s compared with 0.2 per cent in the the public sector, its ability to generate employment for the 9.3 million people who enter the labour force every year is likely to be minimal, ILO's report 'Global Employment Trends' has said.
In India 91 per cent of the total employment is generated in the informal economy, but the adverse consequences of an unfavourable employment situation due to the last two years' economic slowdown are likely to have resulted in more low paid jobs and poor working conditions in the informal economy too, it said.
While the potential for micro, small and medium enterprises to generate employment is high, its capacity to generate decent work conditions is still very weak, it said.
India's formal economy accounts for only 8.3 per cent of the total employment, of which only one-third are private sector undertakings, it added.
India's unemployment rate for 1999-2000 stood at 2.7 per cent according to the ILO.
However, South Asian economies proved resilient in the face of global economic difficulties during 2001-02, the report said, adding, "Nevertheless, security concerns, poor weather conditions, a slowdown in exports and declining tourism revenues caused employment situation to worsen."
South Asian region's unemployment rate too rose from 2.9 per cent in 1995 to 3.4 per cent in 2002, it said.
Painting a grim picture amidst forecasts of economic revival in 2003 by several multilateral agencies, the ILO report said two years of economic slowdown has pushed the number of people without jobs worldwide to a record 180 million, with little prospect of any improvement in the global employment situation this year.
ILO estimates that since 2000 the number of unemployed worldwide grew by 20 million and "the world employmentsituation is deteriorating dramatically," ILO Director-General Juan Somavia said releasing the report.
The weakness of labour markets worldwide has also reversed recent reductions in "working poverty" achieved in the late 1990s.
"This deteriorating world employment picture and the prospect of a weak or delayed recovery is very disturbing," Somavia said.
"A continuation of these trends will dramatically increase the number of unemployed and working poor. A full-scale global recession could have grave consequences for the social and political stability of large parts of the world," he said.