16-May-2024-Special-Article

STATE OF EMPLOYMENT IN INDIA 

India has witnessed a significant surge in employment over recent years, generating over 80 million additional jobs between 2017-18 and 2022-23.  

This rapid growth has sparked discussions about its underlying causes and the sustainability of this trend. 

Key Trends in Employment Growth: 

• Historical Growth: Analysis of NSSO data from 1983 to 2023 reveals consistent growth in principal employment across all sub-periods. 
• Consistent Growth: Principal employment, indicating those working for the bulk of the year, has steadily increased since 1983, with no instances of jobless growth. 
• Significant Increase (2017-2023): The period from 2017-18 to 2022-23 witnessed the fastest increase, adding about 80 million jobs at an annual growth rate of 3.3%. 
• Labour Market Indicators: Recent years have seen improvements in key labour market indicators like the labour force participation rate, workforce participation rate, and unemployment rate, despite long-term deterioration since 2000. 

Employment Quality: 

• Rise in Informal Employment: Approximately 50% of formal sector jobs are informal, with around 82% of the workforce engaged in the informal sector. 
• Dominance of Self-Employment: A substantial portion of employment growth is in the form of own-account workers and unpaid family workers, constituting 55.8% of total employment in 2022. 
• Wage Trends: Aggregate wages and salaries have shown relative stagnation, with average annual growth at 6.6% in nominal terms but only 1.2% after adjusting for inflation. 

Trends in Youth Employment: 

• Increase in Youth Employment: Youth employment and underemployment rose between 2000 and 2019 but declined during the pandemic years. 
• Unemployment Among Educated Youths: The unemployment rate among educated youths has intensified over time, particularly among those with secondary education or higher. 

Concerns Regarding Employment in India: 

• Growth of Informal Sector: Many new jobs are informal, lacking security, benefits, or minimum wage, leading to concerns about job quality. 
• Quality of Jobs for Youth: Youth employment often lacks quality, with many young people over-educated for available jobs or stuck in precarious situations like the gig economy. 
• Gender Gap: Women’s participation in the workforce remains low, with many ending up in unpaid family work or low-paying self-employment instead of formal jobs. 
• Skill Mismatch: The education system may not align with current job market needs, resulting in a skill mismatch. 

• Formalisation Challenges: A significant portion of the workforce remains in the informal sector, posing challenges for formalisation and social security. 
• Job Automation: Automation threatens certain sectors, potentially leading to job displacement, particularly in industries like manufacturing. 
• Vulnerability to Economic Shocks: Informal and casual workers are highly vulnerable to economic downturns, as seen during the Covid-19 pandemic. 
• High Demand for Government Jobs: Limited job creation in the private sector has led to a significant demand for government jobs. 

Government Initiatives Related to Employment: 

1. Support for Livelihood and Enterprise (SMILE) 

1. Pradhan Mantri Dakshta Aur Kushalta Sampann Hitgrahi (PM-DAKSH) 

1. Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) 

1. Pradhan Mantri Kaushal Vikas Yojana (PMKVY) 

1. Start-Up India Scheme 

1. Rozgar Mela 

1. Indira Gandhi Urban Employment Guarantee Scheme- Rajasthan 

1. Direct Benefit Transfer Scheme 

1. Pradhan Mantri Mudra Yojana 

Way Forward: 

• Promote Formalisation: Incentivise informal workers to transition to the formal sector, streamline registration processes for small businesses, and draw on successful international models like Peru’s National Strategy. 
• Targeted Programs for Marginalised Groups: Implement more targeted skill development programs for individuals from marginalised communities, ensuring inclusivity and active participation in the workforce. 
• AI and Automation Reskilling: Prepare the workforce for automation by providing training programs in areas like AI, robotics, and data science to adapt to evolving job market needs. 
• Social Security Portability: Design a portable social security system catering to the needs of gig workers and those transitioning between formal and informal sectors. 
• Entrepreneurship and Innovation: Establish industry-specific startup support mechanisms and encourage angel investor networks to foster entrepreneurship and innovation. 

• Remote Work Opportunities: Encourage companies to offer remote work arrangements, expanding job opportunities and promoting a better work-life balance. 

Mains Question: 

1. “Discuss the recent trends in employment growth in India and highlight the key concerns and government initiatives aimed at addressing the challenges in the labour market.” (150 WORDS)