Key Priorities For Employment Policy

Context: Several decades of relatively high growth have failed to generate enough quality employment for the majority of Indians. India desperately needs a new approach to employment.

Employment crisis in India

• Rising youth unemployment due to lack of skill:  Out of the 22 million who are unemployed in terms of usual status, 18 million are workers in the 15-29 age group. 
• The emphasis on skill for young workers is suggested by the fact that close to 70 % of those in this age group in urban areas and 50 % in rural areas are educated up to secondary or higher level.
• Low quality of public education in India has failed to prepare them for induction into modern manufacturing and service jobs, judging by the frequently voiced complaints by employers.
• Irregulated Conditions of work and remunerations: 
• Huge informal sector: Out of the 230 million workers in the non-agricultural sector, about 100 million are self-employed, mainly in micro-enterprises, 70 million have a regular wage or salary employment, and 60 million are casual labourers.
• Out of the 70 million who have regular paid jobs, about two-thirds have no written job contract, and a little over half have no social security cover, like provident fund, and are not entitled to paid leave.
• About 70 % of the non-agricultural workers are in the informal sector and outside the scope of labour laws.
• Low participation of women:  At present, only 23 % of women are in the labour force as against 57 % of men. Out of the 120 million women who are working, 42 million are just helpers in household enterprises.
• Looking at it state-wise, there is a wide range in the Labour Force Participation Rate of women, from 6 % in Bihar to 52 % in Himachal Pradesh.

Way Forward

• Strengthen the links between growth and job creation to increase opportunities for educated youth:
  • The long-term answer has to lie in measures to improve substantially the quality of education, all the way from pre-primary upwards, and improved child nutrition.
  • The new education policy also includes a proposal for mandatory skill acquisition programmes in schools.
  • Consider incentives to encourage school and college leavers to participate in these skilling pro- grammes. 
    • One way of doing this is to provide all secondary school and college leavers with an unemployment benefit on the condition that they participate in an organised skill development course.
  • Connect the skill programmes and the institutions implementing them to potential employers by involving them in the funding and management of skill development.
  • The link between employment and economic growth depends crucially on the commodity composition of demand growth. 
    • Fast-moving consumer goods, demanded by people at the lower end of the income or export goods demanded by consumers in high wage countries will lead to investments in more labour-intensive activities.
• Improve the conditions of work and remuneration for the millions at the bottom of the work pyramid:
  • In the agriculture sector: Best strategy is programmes like the Mahatma Gandhi National Rural Employment Guarantee Act that provide supplementary employment and underwrite statutory minimum wages in rural areas.
  • In the non-agricultural sector: 
    • To provide every employed person with a written contract and the strict enforcement of minimum wage legislation.
    • There must also be stricter enforcement of improved working conditions for grossly exploited people like construction workers and migrant labourers.
• Raising the participation of women in the workforce: Disparities in women’s participation across India lets us identify the problems – 
  • The broad pattern seems to be women’s participation below the national average in most states in the North and the East and above the national average in hilly and tribal-dominated states and South and West India.
  • This suggests that the differences may be only partly because of variations in the local pace of development and may be attributable to social practices that need to be reformed and work conditions that are more appropriate for women.

Conclusion: To sum up, employment-intensive growth requires an immediate improvement in worker skills, improvement in working conditions in the informal sector, protection of worker rights, a shift of income to poorer households, and an export strategy that focuses on labour-intensive products and services.