INDIA'S JOB CRISIS IN INDIA

Source: indianexpress

1. About

• Unemployment occurs when someone is willing and able to work but does not have a paid job. 
• The unemployment rate is the percentage of people in the labour force who are unemployed. Consequently, measuring the unemployment rate requires identifying who is in the labour force. 
• The labour force includes people who are either employed or unemployed.
• Job security, a challenge for Indians is also one of the greatest opportunities to extract potential. It is a public policy matter that needs to be addressed intelligently by reducing entry barriers along with enhancing quality employment conditions. Though India is the world’s youngest country in terms of demographic dividend, we see India has only 2% of the workforce skilled in comparison with 96% in South Korea, 45% in China, 50-55% in the USA and 74% in Germany.

2. Structural unemployment faced by India

• It refers to a situation that arises as a result of a change in the structure of the economy.
• For instance, when an economy transforms itself from a labour-intensive to a capital-intensive economy, structural unemployment happens due to the mismatch of skills.
• As a result, workers who do not know how to operate the new and advanced technologies will be removed.
• This type of unemployment happens as the current workers do not have the skills required by their employers.

3. Socioeconomic Consequences faced by Unemployment

• The problem of unemployment gives rise to the problem of poverty.
• The government suffers an extra borrowing burden because unemployment causes a decrease in the production and less consumption of goods and services by the people.
• Unemployed persons can easily be enticed by antisocial elements. This makes them lose faith in the democratic values of the country.
• People unemployed for a long time may indulge in illegal and wrong activities for earning money which increases crime in the country.
• Unemployment affects the economy of the country as the workforce that could have been gainfully employed to generate resources actually gets dependent on the remaining working population, thus escalating socio-economic costs for the state. For instance, a 1 % increase in unemployment reduces the GDP by 2 %.
• It is often seen that unemployed people end up getting addicted to drugs and alcohol or attempting suicide, leading to losses to the human resources of the country.

4. Steps taken by the government to bridge unique employment conditions

• Integrated Rural Development Programme (IRDP) was launched in 1980 to create full employment opportunities in rural areas. 
• Training of Rural Youth for Self-Employment (TRYSEM)  was started in 1979 to help unemployed rural youth between the age of 18 and 35 years to acquire skills for self-employment. Priority was given to SC/ST Youth and Women. 
• Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA): It is an employment scheme that was launched in 2005 to provide social security by guaranteeing a minimum of 100 days of paid work per year to all families whose adult members opt for unskilled labour-intensive work. This act provides the Right to Work to people. 
• Pradhan Mantri Kaushal Vikas Yojana (PMKVY), launched in 2015 has the objective of enabling a large number of Indian youth to take up industry-relevant skill training that will help them in securing a better livelihood. 
• Stand Up India Scheme, launched in 2016 aims to facilitate bank loans between Rs 10 lakh and Rs. 1 crore to at least one SC or ST borrower and at least one women borrower per bank branch for setting up a greenfield enterprise. 

5. Reasons associated with unemployment

• Size of the labour force in India is getting a boost from the rapid expansion of the working-age population in the country — the population of 15-59-year-olds increased at the rate of 14 million a year in the 2000s. 
• Nature of labour supply is changing too, with an increased enrolment of young adults for education and their rising job aspirations. Of all 15-29-year-old females in India, 31% had been attending schools or colleges in 2018, up from 16.3% in 2005, though the skills acquired by the young people seem inadequate to cater to the demand. 
• Movement of the workforce out of agriculture: As the average size of land holdings decreases due to greater fragmentation and farming becomes less remunerative, more and more people are moving out of agriculture. But non-agriculture employment is not enough to absorb excess labour supply. 
• Poor growth in manufacturing jobs: Indian manufacturing sector suffers from twin issues of inadequate job creation and low-quality jobs that, in turn, raise the level of working poverty
• Service sector jobs with low employment potential: In India, the period of growth in the service sector coincides with that of “jobless growth”.
• Not enough formal jobs: The majority of job growth has been in the informal sector (65%) in comparison to the formal sector since liberalization
• Absence of job security: A shift in government policy is observed, from job security to job creation, thereby deprioritizing the issue of quality of jobs. This is evident from the fact that the Government has rolled out fixed-term contractual jobs across all industry segments to facilitate faster job creation
• Shrinking Public Sector: Public sector has generally shrunk post liberalization due to its withdrawal from many economic activities. 
• Wage crisis: A large majority of Indians are not being paid what may be termed a ‘living wage. 
• Gender and labour market: Women’s decision to join the labour force is primarily influenced by economic stability at home, rather than educational attainment & age. With increasing family income, many women are opting out of the workforce. 
• Mindset issues: Preference to white-collar jobs symbolic of social status and low dignity of labour; Rise in voluntary unemployment due to people choosing not to work below a certain wage after 'investing' in education
• Education doesn’t focus on employable skills: This has led to a situation where, despite becoming increasingly more educated, the Indian labour force lacks the skills required by the industry.
• Lack of data: The government’s decision to discontinue the NSSO’s 5-year household surveys, failure to regularly release Labour Bureau’s Quarterly Report on Changes in Employment and delay in releasing the NSSO’s Periodic Labour Force Survey have not left policymakers with any credible latest data.

6. Need of the Hour

• One of the remedies to the unemployment situation in India is rapid industrialisation. An increased number of industries will translate into an increased number of employment opportunities.
• The curriculum should be changed with an increased focus on learning and skill development.
• More institutions need to be established that offer vocational courses that will translate directly into relevant jobs.
• Self-employment should be encouraged more with the introduction of liability-free loans and government assistance for funding.
• Incubation centres need to be promoted to cultivate original business ideas that will be financially viable.
• Better irrigation facilities, better farming equipment, and dissemination of knowledge regarding multiple crop rotation and crop management should be focused on.
• Government, as well as leading business houses of the country, should seek to invite more foreign collaboration and capital investment in every sector.
• There are several labour-intensive manufacturing sectors in India such as food processing, leather and footwear, wood manufacturers and furniture, textiles and apparel and garments. Special packages, individually designed for each industry are needed to create jobs.
• Public investment in sectors like health, education, police and judiciary can create many government jobs.