ISSUE

• Employment related data did not accurately reflect the status of employment and employment generation in our country
• India, despite achieving an impressive and steadily rising economic growth in recent years, still faces the twin challenge of creating adequate decent employment opportunities for scores of young men and women joining the labour market every year, and facilitating the transition from informal to formal employment for those already in the labour market.
• The youth presently make up close to 35% of the population and the Indian workforce is expected to increase to approximately 600 million by the year 2022 from the current estimated 473 million.
• First of all we should understand that economic development means not only creation of jobs but also working conditions in which one can work, with freedom, safety and dignity

BACKROUND

• Theoretically and commonly, economic growth comes from higher per capita productivity, that is, the same workforce produces more, or a larger workforce, which ensures growth even with flat productivity.
• But in 2017, the Organisation for Economic Cooperation and Development (OECD) estimated that 30% of Indians aged 18 to 29 were unemployed and looking for work. Plus, joblessness seems to haunt even the highly qualified.
• In India’s case, the economy needs to create employment for roughly 10 lakh people a month to cash in on the demographic dividend.
• However, one of the key contradictions that comes through when you look at the World Bank report is that while India’s Ease of Doing Business ranking is on an upswing, job creation in the country is on the decline.
• The same is confirmed through the 2016-17 Economic Survey data which indicates that employment growth in the country has been sluggish, registering a real decline over the last three years.

Reasons contributing to the sketchy and contradictory numbers

• The country’s informal workforce far outnumbers the formal workforce, although formal employment is growing. A rough estimate based on data collected by the National Sample Survey Office shows 50-55 crore Indians are aged 15-65. Of them, around 22 crore are employed in agriculture and about 28 crore in non-agriculture sectors. Now, because the agriculture sector is underpaid and “overstaffed”, many of those employed in it are attempting to shift to non-agriculture work.
• But when we look at the non-agriculture jobs, only around 6 crore are formal. One reason is India’s complicated labour laws, which incentivise employers, including large corporations and the Railways, to deploy contract labour rather than offer formal employment.
• Late compilation of employment data and lack of one single annual survey that captures the exact number of formal and informal jobs created in a particular year, only adds up to the infamous Jobs Data Crisis in India.
• In a world where technologies are changing rapidly, you have sectors which at one time used to be labor-intensive but are rapidly becoming not so intensive. Textiles, for example, in many countries. When this happens, you need to have employment data to assess which sectors are generating employment and which are not. And then you have to assess whether we are growing fast enough in the sectors that are generating employment to be able to absorb the labour force. That’s how employment data tie in with GDP and sectoral growth.
• The other side of the story also exists. Equally important causes for high prevalence of unemployment are the lack of skills required for jobs that are available and redundancy of some skills. How?
• At the frontline level in the logistics sector, for instance, illiteracy is the biggest challenge followed by language inadequacy and workplace hygiene. At the mid-manager level, it includes lack of knowledge of best practices, technological illiteracy and ineffective planning. At the senior manager level, ineffective talent management, absences of long-term focus and inadequate knowledge of regulations are the challenges.

The Way Ahead

• As India’s labor market shifts, it is time to focus on improved quality of work and the income derived from it, not simply the number of jobs being lost or created. It will require a conscious effort on the part of the government, including in terms of measuring employment more holistically, targeting spending on initiatives, and changing regulation of private-sector investment and innovation to remove barriers to gainful employment.
• Rather than different bodies bringing out complete sets of conflicting data, the need of the hour is for research organisations to come together and bring out statistics that are reliable and capture the demographic differences of the country.
• But we should not forget that the issue is a policy focus as much as a data concern. What we need is a National Employment Policy (NEP) that would be a critical tool to contribute significantly to achieve the goals of the 2030 Agenda for Sustainable Development