- Jobs growth slowed to near-zero during 2014-15 in a sample of 1,072 companies
- The number of jobs in manufacturing sector also declined, despite the government’s ‘Make In India’ push
- The number of unemployed people in India is expected to rise by 1 lakh in 2017 and another 2 lakh in 2018 : ILO
- Government is working on a new sector-wise Employment Policy
- The pace of job creation fell to a six-year low in 2015 with 1.35 lakh new jobs being created compared with 4.21 lakh new jobs in 2014 and 4.19 lakh in 2013
- India needs to clock 8-10% growth for greater job creation
Fundamental Issues which impact employment:
- India has an employability problem. While the services can rather easily recruit skilled white-collar workers (IT engineers, English-speaking people for the call centres, etc), the industry cannot transform peasants into factory workers so quickly. Such a transition requires basic training, which is missing.
- Small and medium enterprises (SMEs) is not being promoted in India. Their labour intensity is four times higher than that of large firms
What should be done?
- To create jobs, tax incentives and interest subsidies can be given to firms creating jobs and some blue-sky interventions to invigorate sectors.
- For instance, negotiate free trade pacts with major markets such as the European Union and the U.S. to boost textiles, improve regional air connectivity for tourism, and so on.
- This year’s Budget offers to pay 8.33 per cent of the salary (as contribution for a pension scheme) for new employees getting formal sector jobs
- Appoint a National Jobs Adviser to the Prime Minister in the PMO:
- The Adviser would align job growth planning with economic planning; ensure integration of the multiple but job related policies across central ministries, as well as with the states; enable sharing of best practices between states, and provide a liaison between government and the private sector.
- Most importantly, the Adviser would monitor actual outcomes for quick mid-course policy corrections as needed.
- Create a vast, integrated, national ecosystem for entrepreneurship education, mentoring and support.
- Make it easy for startups:
- ‘Startup India’ addresses many but not all the needs of entrepreneurs.
- Access to a national network of mentors and angel investors; and easy access to government procurement opportunities with simplified rules are essential.
- Policies that incentivise private investors to provide long-term equity and debt capital to startups are critical.
- Enable growth in existing Small & Medium Enterprises (SMEs):
- India’s archaic classifications of micro, small and medium businesses, based on invested capital, need to be scrapped and policies need to encourage every business to grow to become a medium business, or larger, creating a more dynamic economy and more jobs. We need to establish SME ecosystems for high-value manufacturing, for example to support defence and railways. We need to attract long-term investors to invest in SMEs, not just startups.
- Launch a major Startup & Small Business Innovation Initiative (SSBI):
- Some 40 years ago, the US launched ‘Small Business Innovation & Research’ initiative wherein various government departments allocate funding for innovation by SMEs, selected through an open, competitive process. This has helped create thousands of new companies and millions of new, quality jobs.
“Reforms, economic growth, progress – all are empty words if they do not translate into jobs.” Write a note on initiatives taken by the government to improve employment opportunities in the country. (200 Words)
Recently government has taken many initiatives with the intent of creating more jobs and meaningful utilization of the vast workforce available in India. Some of the major initiatives are:
- Make in India – A flagship initiative to boost the manufacturing sector so as to create ample job opportunities for youth.
- Apprentice Protsahan Yojna – to provide assistance and guidance to industries to provide training to new apprentices and they can later be absorbed easily in the industries.
- Ustaad for encouraging traditional skills like Zardoshi, Fulkari, Embroidary and providing a market to this art crafts.
- Nai Manzil for skilling Madarsa pass-outs to join main-stream.
- Skill Development programs – Deen Dayal Upadhyay Antyodaya Yojana to develop 10 lakh skilled youth in next 3 years
- National Manufacturing Policy and Information Technology policy also envisages creation of millions of jobs in these sectors.
The urgent need is to create more jobs for youth which necessitates skill development.
With the favorable condition of 3D – Demographic dividend, Democracy and Demand, India cannot afford to lose this golden opportunity in hand.
It is found that the Indian economy went through a period of jobless growth when five million jobs were lost between 2004-05 and 2009-10. Critically analyse the causes of this pattern of growth. (200 Words)
Indian economy works paradoxically. While the years between 2004-05 and 2009-10 gave us the fastest ever, an incredible, 9% growth rate, an opposite picture emerged in the labour market. Here’s why
- Services led growth– The period was marked by a stagnation of manufacturing and decline in agriculture sector, in relative terms. India has shown a lot of expertise and growth in the services sector. Yet, services sector brings far less employment than the manufacturing and agriculture, where more physical labour is required.
- Greater infusion of technology– In many instances, growth in technology, reduces the demand for labour. A vivid example comes from the automobile sector. Here, Robots have reduced the requirement of people.
- Disparity – The few rich have become richer, while the numerous poor still perish. Yet, measurement of GDP is only based on the principle of aggregate. Thus, it fails to take into account the quality of growth and employment.
- The employment rate has also gone down because the public sector, which used to employ more people, relatively speaking, has slowed down.
- Similarly, organised businesses, which requires lesser labour has grown more than the MSMEs.
- Casualization of work force also increased because of increasing labour wages and other factor costs. India’s archaic and rigid labour laws need to reform . Creaking infrastructure, poor power supply and land availability issues are other commonly cited reasons for the fact that India has seen no addition of labour intensive manufacturing units.
- Low participation of women workforce in India.
By, conceptualizing MAKE IN INDIA, the Indian Govt. has sown the seeds of change. Yet, more steps like focusing on agriculture, skill development and implementing the promised details, is required before the largest growth rate of GDP, makes meaning to the majority of us
- How globalization has led to the reduction of employment in the formal sector of the Indian economy? Is increased informalization detrimental to the development of the country? (UPSC Mains 2016)