Open Forum
New
Delhi, 4 January 2023
Growing Unemployment
CREATION OF URBAN JOBS CRITICAL
By Dhurjati Mukherjee
The after effect of the pandemic
looms large in the country with job creation being a critical challenge.
Recently, the government’s quarterly urban Periodic Labour Force Survey (PLFS) and
the Centre for Monitoring Indian Economy’s consumer Pyramids Household Survey has
found India’s unemployment rate at 7.2% and 8% as of September and November
respectively. This means, around 3.8-3.9 crore Indians of the working age
population, who are willing and able to search for jobs, are not able to get
one.
This is only part of the story as
the total unemployed youths are not taken into consideration. Moreover, those
who call themselves employed, may be working part-time and drawing a paltry
remuneration. Joblessness plaguing the nation has got worse and despite
promises the ruling dispensation needs to act. Another aspect requiring urgent
attention is gender disparity. The female labour force participation is just 19%and
even lower than a conservative Muslim country such as Saudi Arabia.
According to International Labour Organisation,
gender discrepancy is enormous even within the well-educated sections of
society. In 2019, only 30% of Indian females with tertiary education
participated in the labour force as compared to around 81% males. Youth
unemployment has also been increasing steadily. From 22% in 2019, it reached 28%
in 2021 and will be perhaps 30% presently. But this figure is not quite
indicative as it does also include youth who earn but not enough for a decent
livelihood.
The PLFS indicates that around 47%
of labour force works in the agriculture sector today as compared to 42.5% in
2019. This increase is not just a pandemic effect. Between 2018-19 and 2019-20,
agricultural employment increased by 3.4 crore, whereas industry and services
employment only grew by 93 lakhs. The government’s claim of creating 8 lakh jobs
under this Scheme appears quite optimistic. And with subsidies being directed
into capital-intensive industries, there seems less improvement as this offer little
job potential.
By the middle of the decade, it’s
estimated that 50-odd million job seekers will come into the labour market as already
there of crores of youth yearning and hunting for jobs, any jobs. There is not
much that can be expected from each of Performance-linked Incentive jobsas the
the target is implausibly large to meet the need; it obviously can’t be the
solution alone in the backdrop that a huge segment of unskilled and semi-skilled
workers who don’t have adequate job opportunities, are those residing in rural
areas.
In recent months, analysts have
warned of lower formal sector employment and subdued rural wages which could
prove to be a dampener on consumption. “Improving contact-intensive services
amid stable urban consumption demand could continue at a slower pace for some
more time,” says a report by Emkay Global Financial on the second quarter GDP
data, adding its channel checks depict quite mixed demand trends during the
recent festive season. The formal sector employment growth seems to be
reducing, indicated by the sequential fall in new Employees Provident Fund Organisation
(EPFO) payrolls and the Naukri Job index. Additionally, subdued real rural wage
growth is expected to further impact rural consumption.
CRISIL, the analytical company providing
ratings, research, and risk and policy advisory services has noted that while
domestic demand has stayed relatively resilient so far, it would be tested next
year by the current weakening industrial activity. Increasing transmission of
interest rate hikes to consumers will also be a pressure point and rural income
prospects remain dependent on vagaries of weather, it added. Some feel there is
a lowering demand for MGNREGA jobs, which is debatable as rural economy is
stagnating with depressed wages and with little or no likelihood of the demand
picking up.
The government is trying to boost up
industrial activity but there’s not much increase in industrial output. In
fact, in October it had shrunk 4% to a 26-month low and forex reserves had
fallen by $72 billion a year. Additionally, the government is not concentrating
on the labour-intensive sector, where job potential is undeniably high.
From a development point of view,
industry can be divided into a formal capital-intensive sector and an informal
cottage industry sector. Capital seems to have got concentrated almost entirely
in the former and labour in the latter. It has been seen that hardly any
attractive job opportunities have opened up for unskilled and even semi-skilled
workers except in the public sector. India continues to remain primarily
agricultural, with over 60% of the workforce still trapped in that sector till
the late 80s, which may be around 55% presently.
Meanwhile, the forecast for this
year is not quite encouraging, rather worrying thereby retarding the
possibility of a growth in employment opportunities. With domestic demand being
insufficient, it is difficult to presume expansion of the labour-intensive
industrial sector, which can actually generate job opportunities. Moreover, there
is the resource crunch aspect of most States which are busy with rather
unproductive welfare schemes and don’t have sufficient funds to promote
industrial activity. However, it is time that industrial clusters with small
and cottage industries should be encouraged.
Besides, district infrastructure is
rather poor and needs to be improved vastly to encourage setting up of
manufacturing units that could promote employment creation. Experts need to be
consulted, and universities tapped so as to prepare and frame a realistic and
achievable policy so that government aid could be extended to units that
generate employment. Plus, the service sector should be given additional
impetus as it is contributing to employment creation.
Finally, it needs to be emphasised that
the government must create adequate employment opportunities to ensure that the
social fibre of society is maintained, and that social disturbance is checked
given that the youth may be waylaid to anti-social activities. In this context,
the government may seriously think of starting an urban job scheme for the poor
and the economically weaker sections, as has been suggested by many experts.
Undoubtedly, lack of productive work has a negative effect on the
socio-economic structure, more so with widening inequality in wages and incomes.
Corrections need to be made. And urgently. ---INFA
(Copyright, India News & Feature
Alliance)
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