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A recent survey by the Labour Bureau depicted a creation of only 1.35 lakh jobs in 2015 as compared to 9 lakh in 2011 and 4.19 lakh in 2013 in eight labour-intensive industries. Since almost one million new people enter the job market every month. The Indian economy today needs to generate 115 million non-farm jobs over the next decade to gainfully employ its workforce and reap its demographic dividend. However, the above mentioned figures suggest a deviation from this path.
The Economic Survey (2014-15) showed that during the last decade (2001-11), the growth rate of the labour force (2.23 per cent) was significantly higher than the growth rate of employment (1.4 per cent), which itself was several-fold less than the growth rate of the economy.
Jobless growth can be explained in terms of two most important factors as follows.
First, India has an employability problem. While the services can rather easily recruit skilled white-collar workers, the industry cannot transform peasants into factory workers so quickly. Such a transition requires basic training, which is missing.
Causes behind Employability Problem: The problem of employability can be largely associated with the poor quality of Public Education. The dropout rates continue to be high and the fact that the government seems to rely on private initiatives in this domain also stands in stark contrast to an important reality: No country has developed without a robust public education system.
What needs to be done: The youth of India needs to be made employable. ? like incorporating vocational training in educational courses; ? Plans to set up 1500 Multi Skill Training Institutes across the country (Rs.1,700 crore provided in the Budget 2016-17) ? Linking State Employment Exchanges with National Career Service Platform ? Common Norms for skill development schemes across India notified to ensure standardisation ? Operationalisation of National Skill Qualification Framework (NSQF)
What has been done: ? The birth of India’s first Ministry of Skill Development and Entrepreneurship to streamline the efforts ? India’s first National Skill Development Mission launched in July 2015 to coordinate and Scale up Skilling Efforts ? India’s First National Policy for Skill Development and Entrepreneurship 2015 created to rejuvenate India’s skill ecosystem ? Pradhan Mantri Kaushal Vikas Yojana and other related schemes
The second factor that needs to be pointed out pertains to the small and medium enterprises (SMEs). Their labour intensity is four times higher than that of large firms.
SMEs, which employ 40 per cent of the workforce of the country and which represent about 45 per cent of India’s manufacturing output and 40 per cent of India’s total exports, are in a better position to do so — but they are not treated well.
Causes:
First, they have poor access to credit. According to a survey, approximately 95 per cent of units still require to be brought into banking fold. As a result, they get a small share of the net credit of India’s domestic banks, whereas these banks are mandated to register at least 20 per cent year-to-year growth in credit to micro and small enterprises.
Second, the SMEs are badly affected by the erosion of state protections which harked back to the Gandhian era. After Independence, cottage industries benefited from a form of positive discrimination: Hundreds of items were reserved to them. Neoliberals criticised this infringement on the law of the market. The recent decision of the Union government to remove this “absurd” system in the case of the making of furniture, was hailed by the economists. But the new policy may be more absurd if it results in the replacement of workers (carpenters) by machines — that highly capitalistic big companies will import from abroad, on the top of it.
Thirdly, the big companies are also the main beneficiaries of the fiscal policy of the government. The total amount of tax exemptions represent Rs 5,50,000 crore in the 2015-16 budget, including Rs 1,84,764 crore for Central excise duties and Rs 3,01,688 crore for customs duties. The big corporate houses, which have sometimes also established their own SEZs, largely profit by this infringement on the law of market.
What needs to be done: rationalisation of fiscal exemptions protection (positive discrimination) in few sectors along with technological aid to enhance their productivity Developing skilled workforce better access to credit and formulation of schemes to promote their interests
What already done: Udyog Aadhaar Memorandum (UAM) Framework for Revival and Rehabilitation of MSMEs A Scheme for Promotion of Innovation, Rural Industry and Entrepreneurship (ASPIRE) Scheme of Fund for Regeneration of Traditional Industries (SFURTI) Prime Minister’s Employment Generation Programme (PMEGP) etc.
By: Chandan Sharma ProfileResourcesReport error
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