Source: This post is based on the article “Key priorities for employment policy” published in Business Standard on 30th August 2021.
Relevance: Employment Generation in India and Employment strategy for India.
Synopsis: Measures that generate income for the poor are more important than modifying the applicability threshold for labour laws.
Several decades of relatively high growth has failed to generate enough quality employment for the majority of Indians. The consequences of this failure are visible in
- rising inequality of income,
- the social unrest and vigilante violence fuelled by unemployed youngsters,
- a growing politicization of the tension between locals and migrants from other parts of India,
- stagnation, and
- a decline in the living conditions of millions trapped in low-quality employment.
Hence, India needs to focus on creating a sound employment strategy for youth because out of the 22 million who are unemployed in terms of usual status, 18 million are workers in the 15-29 age group.
It should be based on the following dimensions:
- Employment approach that strengthens the links between growth and job creation.
- Increase opportunities for educated youth.
- Improves substantially the conditions of work and remuneration for the millions at the bottom of the work pyramid.
- Increases substantially the participation of women in the workforce.
What needs to be done?
- First, improve the quality of education from pre-primary upwards and improved child nutrition. For example, the new education policy includes a proposal for mandatory skill acquisition programmes in schools.
- Second, giving incentives to encourage school and college leavers to participate in these skilling programmes. Provide all secondary school and college leavers with an unemployment benefit on the condition that they participate in an organised skill development course.
- Third, connect the skill programmes and the institutions implementing them to potential employers by involving them in the funding and management of skill development.
- Fourth, provide every employed person with a written contract and the strict enforcement of minimum wage legislation.
- Fifth, improving the conditions of work for the vast majority of workers. In agriculture, the number of employers is so large that the 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.
- Lastly, raising the participation of women in the workforce. At present, only 23% of women are in the labour force, as against 57% of men. There is a wide range in the Labour Force Participation Rate of women, from 6% in Bihar to 52% in Himachal Pradesh. This suggests that the differences are partly because of variations in the local pace of development and due to social practices.
If we improve the earnings for people at the bottom of the income pyramid, there will be substantial economic gain with a better connection between growth and job creation.