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The Eternal Quest for Employment

Context

The article talks about the need for better quality economic growth and more thorough data collection by the government so that policy decisions can be made with more knowledge. This means that we need more quality jobs, not just more jobs.

Relevance

GS Paper 2: Issues relating to development and management of Social Sector/Services relating to Health, Education, Human Resources.

Mains Question

Do you believe that the greatest challenge confronting India is a lack of job opportunities? Discuss.(250 words)


Key Terms

  • Labor Force: The labour force is the part of the population that provides or offers to provide labour for economic activities to make goods and services. This includes both people who are working and people who are looking for work.
  • Unemployment Rate: The unemployment rate is the number of unemployed people out of the total number of people who want to work.
  • Labour Force Participation Rate (LFPR): The LFPR is the percentage of people in the working age group, which is usually 15 years and older, who are working or actively looking for work. It is based on their age.
  • Worker Population Ratio (WPR): This is the number of people who are working out of the total population.
  • Datasets about creating jobs
  • Periodic Labour Force Survey (PLFS): This is a survey put out by the Ministry of Statistics and Programme Implementation’s National Statistical Office (NSO) (MOSPI).
    • The quarterly bulletin is for cities, while the annual PLFS report is for both rural and urban areas.
    • It figures out the most important employment and unemployment rates, such as the Worker Population Ratio, the Labour Force Participation Rate, and the Unemployment Rate.
  • Consumer Pyramids Household Survey: This survey is done by the Centre for Monitoring Indian Economy (CMIE) to find out how households’ financial situations have changed in the past few months.

Data indicating job scenario in India

  • Unemployment in cities: The 16th PLFS showed that the unemployment rate for people aged 15 and up in cities fell for the fifth straight quarter (July-September 2022) to 7.2%, down from 9.8% last year.
    • According to CMIE data, India’s unemployment rate jumped from 7.77% in October to 8.96% in November.
  • PLFS data shows that unemployment is going down, while CMIE data shows that unemployment is going up. This is because CMIE data does not count unpaid family work as employment, but PLFS does.
  • So, the fact that unpaid family work is going up while the economy is slowing down is a sign of trouble in both rural and urban areas.
  • Workforce participation: Around 46% of people in India are currently working. This means that out of every 100 Indians who are old enough to work, a shocking 54 are not in the labour force.
    • From 2016-17 to 2021-22, the number of people working in India went down from 445 million to 435 million.
  • LFPR was 58% in Brazil in 2021, 68% in Indonesia, and 60% or so in all OECD countries.
  • Participation in the city vs. the country: The participation rate dropped more in the city than in the country.
    • In cities, the rate went from 44.7% to 37.5%, and in rural areas, it went from 46.9% to 41.4%.
  • In 2016–17, about 15% of women were either working or looking for work. This number went down to 9.2% in 2021-22, which shows that women aren’t getting jobs that are appealing.
    • At 19%, India has an even lower rate of women working than Saudi Arabia, which has a rate of more than 30%.
    • During the same time period, the number of men who worked dropped from more than 74% to 67%.
  • ILO says that the difference between men and women in India is huge, even among the educated.
  • Unemployment among young people has also been steadily going up. In 2010, 18% of young people were out of work. In 2019, that number was 22%, and in 2021, it was 28%.
  • Participation goes up after 25: The CMIE data also shows that the number of men in the labour force goes up after the age of 25. This suggests that only a small number of people who might study for tests for jobs in the public sector pass.

How the work force is split up

  • The number of people working in agriculture is on the rise. According to the PLFS, 46.5% of the labour force works in agriculture now, up from 42.5% in 2000. 5% in 2019.
    • From 2018-19 to 2019-20, there were 3 more jobs in agriculture. 4 crores, but there were only 93 lakhs more jobs in industry and services.
  • The number of regular salaried employees is going down. They went from 24% in 2018-19 to 21% in 2020-21, which shows that the number and quality of non-agricultural jobs are going down.
    • This worries me because India might be the only developing country that is trying to get people to go back to farming.

Limitations of job-related datasets

  • People who aren’t counted: The unemployment rate only includes people who are out of work and looking for work. For example, a 24-year-old who is training for a job in the public sector or a 35-year-old who has stopped looking for work are not counted.
  • Doesn’t say anything about the quality of jobs or how productive they are. For example, hidden unemployment doesn’t show up in these numbers.
    • False unemployment doesn’t affect the economy as a whole because there are more people working than are actually needed.

India’s government is taking steps to deal with unemployment.

  • Atma Nirbhar Bharat Rojgar Yojana (ABRY): It was started in 2020 as part of Atma Nirbhar Bharat package 3.0 to encourage employers to create new jobs, along with social security benefits to make up for jobs lost during the Covid-19 pandemic.
  • National Career Service (NCS) Project: Its goal was to offer a variety of services related to careers, such as job matching, career counselling, vocational guidance, information on skill development courses, apprenticeships, internships, etc.
  • PM SVANidhi: Its goal is to help street vendors get back to work after the Covid-19 lockdown by giving them affordable working capital.
  • Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA): This law was meant to give every rural household whose adults volunteered to do unskilled manual work at least 100 days of guaranteed wage work in a financial year.
  • Production Linked Incentives scheme: This is the main programme of the Ministry of Skill Development, and it plans to create 8 lakh jobs by 2025.
    • However, 50 million new people will be looking for work during this time. This means that PLI can’t solve unemployment all by itself.

Conclusion

  • India is losing out on more than just direct productivity because of its bad job market. It is also missing out on new ideas and valuable innovations.
  • Because of this, the government, the private sector, and civil society all need to work together to find a way to get a full picture of India’s job market.
  • The goal of collecting this kind of information is not to make the government look bad, but to help it make better policy decisions that will lead to more and better jobs.

February 2023
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