GS Paper 3
Syllabus: Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment
Context: Among other things, the quality of economic growth is best measured by how well it translates into good quality jobs – a metric on which India falls short.
Status of employment in India:
- As per the NSO’s Periodic Labour Force Survey (PLFS) and CMIE’s Consumer Pyramids Household Survey, India’s unemployment rate was 8% as of November 2022.
- This means, around 3.5 – 3.9 crore Indians of working age population, who are willing and able to search for jobs, aren’t able to get one.
- The labour force participation rate (LFPR) – the fraction employed or looking for a job, is currently around 46% (in 2021, in Brazil – 58%, Indonesia – 68%, all OECD – 60%). So, for every 100 Indians of working age, 54 do not participate in the labour force.
Issues related to employment in India:
- Lack of reliable jobs data: As such data helps the government to make more informed policy decisions.
- Problems in the available data: For example,
- The unemployment rate excludes a 24-year-old preparing for public sector jobs or a 35-year-old who has given up looking.
- Silent on the quality and productivity of jobs. For instance, excludes data on disguised unemployment – 5 people tilling a small field, when only 2 would be sufficient.
- Missing women – gender discrepancy is enormous: At 19%, the female LFPR in India is even lower than Saudi Arabia. In 2019, only 30% of Indian females (81% – males) with tertiary education participated in the labour force (ILO).
- It signifies both rising family incomes (females are not required to undertake jobs) and shortage of safe and secure, attractive jobs for women.
- This led to productivity losses, loss of new ideas and innovations.
- Increasing youth unemployment: It was 22% in 2019, 28% in 2021 as compared to 18% in 2010.
- Quality and number of non-agricultural jobs decreased:
- The PLFS indicates 46.5% of the labour force works in the agriculture sector today as compared to 42.5% in 2019.
- This increase is not just a pandemic effect, as between 2018-2020, agricultural employment increased by 3.4 crore while industry and services only by 93 lakh.
- Regular salaried employees too have dropped from 24% in 2018-19 to 21% in 2020-21.
Recent initiatives to boost employment rate in India:
- Production Linked Incentives (PLI) scheme: 8 lakh jobs will be created over the next 5 years by directing subsidies into capital-intensive industries.
- Indian military’s Agnipath Scheme
Some employment Generation Schemes of Government of India
|Sr. No.||Name of the Scheme/ Programme||Ministry||Remarks|
|1||Atmanirbhar Bharat Rojgar Yojana (ABRY)||Ministry of Labour and Employment||It was launched with effect in 2020 as part of Atmanirbhar Bharat package 3.0 to incentivise employers for creation of new employment along with social security benefits and restoration of loss of employment during Covid-19 pandemic.|
|2||Pradhan Mantri Rojgar Protsahan Yojana (PMRPY)||“||It was launched in 2016 to incentivise employers for creation of new employment.|
|3||National Career Service (NCS) Project||“||Project for transformation of the National Employment Service to provide a variety of career related services like job matching, career counselling, vocational guidance, information on skill development courses, etc.|
Programmes that have the potential to generate productive employment
|1||Digital India||MeitY||Digital India seeks to transform India into a digitally empowered society and knowledge economy.|
|2||Stand up India Scheme||Ministry of Finance||Stand-Up India Scheme for financing SC/ST and/or Women Entrepreneurs. The objective of the Stand-Up India scheme is to facilitate bank loans for setting up a greenfield enterprise.|
|3||Startup India||DPIIT, Ministry of Commerce & Industry||Startup India intends to catalyse startup culture and build a strong and inclusive ecosystem for innovation and entrepreneurship in India.|
- 50 million job seekers will join the labour market over the next 5 years period and crores are already looking for jobs.
- The unexpected outburst of youth in response to the Agnipath Scheme adds to the evidence that India is failing to create jobs.
Way ahead: Government, private sector and civil society must come together to find a sustainable way to create more and better jobs.
Q. Examine the causes behind unemployment in India. What measures are needed to ensure adequate job creation in order to reduce the rate of unemployment? (250 words)