Labour
Employment Scenario in IndiaEmployment generation is one of the major priorities drawing the attention of the governments and economic planners all over the world. India is no exception.
The approach to tackling unemployment problem have varied from time to time. In the initial years of planning no attempt was made to define an independent employment strategy. The focus on economic growth was viewed as essential for improving the employment situation. Thus, in the Five Year Plans, the generation of employment was viewed as part of the process of development.
It was, however, observed that the rate of growth of employment was generally much lower than the GDP rate of growth of the economy. Seasons of severe drought and failure of monsoons exposed large sections of population to extensive deprivations and compounded the situation. Successive plan strategies, policies and programmes were, therefore, re-designed to bring about a special focus on employment generation as a specific objective.
The seventies and eighties saw the emergence of special schemes like NREP, RLEGP to provide wage employment through public works programmes and schemes to promote self-employment and entrepreneurship to the unemployed and the poor. Employment levels expanded steadily during the seventies and eighties but the rate of growth of employment continued to lag behind that of the labour force. Unemployment among the educated showed a rising trend.
In 1998-99, various poverty alleviation and employment generation programmes were re-grouped under two broad categories of self-employment schemes and wage employment schemes. Funding and organizational patterns were also rationalized for better results.
WORKFORCEIndia's labour force is growing at a rate of 2.5 percent annually, but employment is growing at only 2.3 per cent. Thus, the country is faced with the challenge of not only absorbing new entrants to the job market (estimated at seven million people every year), but also clearing the backlog.
More than 90 per cent of the 37 crore strong labour force is employed in the "unorganised sector" and are largely bereft of social security and other benefits of employment available in the "organised sector".Sixty per cent of India's workforce is self-employed, many of them remain very poor. Nearly 30 per cent are casual workers who are only seasonally employed. In the rural areas, agricultural workers form the bulk of the unorganised sector.
Unorganised sector is also made up of jobs in which the Minimum Wage Act is either not, or only marginally, implemented. The absence of unions in the unorganized sector does not provide any opportunity for collective bargaining.
The bane of India’s labour force is that over 70 per cent of workers are either illiterate or educated below the primary level.
With the opening of Indian economy and linking it to global economies, the rate of growth of employment declined sharply in 1990s as compared to 1980s. The decline in employment growth has been seen in conjunction with the decline in the labour force growth rate.
There is also a wide variation in unemployment rates across the states. Measured on Current Daily Status basis, unemployment ranges from a low of around 3 percent in Himachal Pradesh and Rajasthan to a high of 21 percent in Kerala.
While there may be divergence of opinion on the extent of under employment and unemployment, there is convergence of views on the need to expand employment. In order to achieve this goal, the economists have emphasized that any programme for this purpose must focus on growth, labour productivity and relative price of labour and capital. They have further suggested that micro economic policy framework must be such as to facilitate accelerated growth rate of 9 percent on a sustained basis. According to the noted economist Dr. C. Rangarajan a sustained growth of 9 percent per annum will totally eliminate unemployment by 2012.
Sector specific policies are required which would acclerate the growth of labour intensive sectors. These include among others agriculture, food processing and small-scale units in various sectors.
NREGAOne of the most significant interventions by the government to generate employment has been the launch of the National Rural Employment Guarantee Act (NREGA) in February 2006 in two hundred most backward districts of the country. Consequently, the scheme was extended to another 130 districts and from April 2008 it would be operative in all districts. For the current financial year, a budget provision of Rs.12, 000 crores was made for implementation of the Act. NREGA being demand driven, so far, nearly 2.12 crore house holds have been provided with employment. Under NREGA, 6.399.55 lakh person days works have been taken up for creating village assets that would in turn enrich rural and women has considerably gone up in this wage employment programme economy. The participation of weaker sections of the society, such as SC/STs
SKILL DEVELOPMENTSkill development of labour force is fundamental both to employment generation and improving productivity of labour. India has one of the largest labour forces in the world but the least number of skilled workers constituting only 5 percent compared to South Korea’s 95 percent.
Almost 44 percent of labour force in 1999-2000 was illiterate and 33 percent had schooling up to secondary education level only. The other bane of our work force is that while their educational attainment is very low on the one hand, 61% of those educated up to secondary level and beyond, on the other hand, are without any professional skills. This is because our general education system is not oriented towards attaining vocational skills. The mid term appraisal of the 10th Plan points out, “our education system is not generating sufficient supply of trained people especially those trained in skills that are in demand.” This has created a miss-match between the supply and demand of skills.
Increasing pace of globalization and technological change provides both challenges and growing opportunities for economic expansion and job creation. “In a rapidly changing environment, new ways and means of ensuring that people who work, possess the necessary knowledge, skills and attitude are criteria for seizing the opportunities inherent in globalisation and technical progress while reducing their unwanted consequences”, reports International Labour Organisation.
The Prime Minister Dr. Manmohan Singh addressing the Indian Labour Conference in early 2007 said that the country would have to meet the challenge of increasing the skilled work force from the present 5% to about 50%, which is the norm in developed countries. He said, “To make our working people employable, we must create adequate infrastructure for skill training and certification and for imparting training. Industrial Training Institutes must keep pace with the technological demands of modern industry and the expanding universe of technical knowledge”.
Responding to meet the challenge of the present and future needs of skill development, the Ministry of Labour and Employment has initiated a massive skill development programme. It has embarked on an initiative to impart skills to country’s half of the labour force within next five years. Under this initiative vocational training will be provided to one million persons in 5 years and subsequently to one million people each year in close collaboration with State Governments, Industries, Trade Associations and other training providers. A provision of Rs. 555 crore has been made so far for this purpose.
MODERNISATION OF ITIsThe Ministry has also embarked on upgrading Industrial Training Institutes (ITIs) for meeting the emerging market needs. During the 10th Plan 500 ITIs have been taken up for upgradation through public-private partnership. In addition 1396 ITIs are being upgraded during the 11th Plan beginning with 300 ITIs each year from the current financial year. The upgraded ITIs to be known as ‘Centres of Excellence’ will produce workers with world-class skills to enable them to compete in the global labour markets. The important aspects of the modernizations are multi entry and multi exit options to workers to upgrade their skills through multi skilled courses and the public-private partnership, which is being ensured through greater involvement of industry in all aspects of training.
One significant factor in the employment situation in the country is that the bulk of employment is in the unorganised sector. There has to be an endeavour to shift as much of labour force as possible from the unorganised to the organised sector. This would give workers a better deal in terms of wages. This is possible only if the rigidities in the labour market are relaxed and wage determination begins to reflect the resource endowment in the country. This would encourage establishments to adopt labour intensive technologies.
There has been a welcome and widespread social acceptance of the imperative need of the Indian economy to achieve higher growth rate of GDP in a sustained manner. The country recently achieved 9 percent GDP growth, which it not only plans to sustain but take it to a double-digit growth during the 11th plan.
It may not be difficult to meet the formidable challenge of providing job opportunities to eight million people every year. For this the growth rate of economy has to be accelerated, special emphasis to be given to labour intensive sectors, improving labour skills and functioning of the labour market.
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*A Retired Indian Information Service Officer
Disclaimer:The views expressed by the author in this feature are entirely his own and not necessarily reflect the views of PIB.
RTS/PM
SS-01/SF-01/02.1.2008