ONE of the biggest challenges confronting the National Democratic Alliance (NDA) government headed by Prime Minister Narendra Modi, just a little more than a year before it faces the electorate in general elections in May 2019, is the looming crisis on the employment front.
Not surprisingly, the entire government machinery is now geared to ensure the generation of adequate number of jobs between now and the elections to keep the growing army of restless youngsters under control.
Analysts expect finance minister Arun Jaitley to unfold multi-billion-rupee plans relating to employment generation and skills development schemes in his budget to be presented this week on February 1.
Jaitley is expected to allot huge funds for the ambitious National Employment Policy and the universal social security scheme that are being furiously worked out by officials.
Similarly, two other ambitious schemes — the loan scheme of the Micro Unit Development and Refinance Agency (Mudra) and the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) — are expected to see a hefty boost in allocations to curb the growing unemployment rate.
Likewise, labour-intensive industries including textiles and handloom, apparels and footwear are expected to be the focus of government incentives to ensure that they generate new jobs.
One of the key factors that saw the Modi government being voted to power in 2014 was its promise of employment generation, which saw millions of youngsters voting for the party.
The entire government machinery is now geared to ensure the generation of adequate number of jobs between now and the elections to keep the growing army of restless youngsters under control
Modi had promised the electorate that if the BJP came to power it would generate 10 million jobs a year. The party’s manifesto also spoke of generating 250m jobs in India over the next 10 years.
But the past few years have seen a slowdown in employment generation; worse, there has been a surge in the number of people losing their jobs. According to a report by the Centre for Monitoring Indian Economy (CMIE) and the Bombay Stock Exchange, about 1.5m jobs were lost between December 2016 and April 2017, with a 4.7 per cent unemployment rate.
Immediately after coming to power, the NDA government reported creation of 421,000 new jobs in the country, as against 419,000 jobs in the previous year when the Congress-led United Progressive Alliance (UPA) was in power.
However, in 2015, the number of new jobs that were created plunged to a mere 135,000, though it improved a year later to 400,000.
But according to recent CMIE-BSE data, the unemployment rate in the country now is at a high of 5.13pc. Of course, this is lower than 9.9pc in September 2016.
Labour minister Bandaru Dattatreya recently revealed that the government is working on its National Employment Policy, which would help generate more jobs in the formal economy.
The NDA government is also keen to ensure social security coverage to all workers — including those in the informal segment — and this could be unveiled in Jaitley’s budget later this week.
BUT last week, the government faced a grim situation when the International Labour Organisation (ILO) in its annual report suggested that India’s unemployment rate could climb to 3.5pc in the current year, up from 3.4pc projected earlier.
The ILO report — ‘World Employment and Social Outlook: Trends 2018’ — estimates that the number of jobless people in India could rise to 18.6m in 2018 and 18.9m in 2019, as against 18.3m in 2017. Last year’s report had suggested 18m jobless Indians in 2018 and 17.8m in 2017.
The report says India’s unemployment rate dipped from 3.6pc in 2012 to 3.4 pc in 2014, but rose to 3.5 pc in 2015. Globally though, the unemployment rate is expected to dip slightly to 5.5 pc in 2018 from 5.6pc in 2017. The world over, 192.3m will be jobless in 2018.
Analysts expect finance minister Arun Jaitley to unfold multi-billion-rupee plans relating to employment generation and skills development schemes in his budget to be presented this week on February 1
But while overall unemployment still appears to be low, the rate in the 15-24 age group is expected to touch 10.7pc in 2019 from 10.5pc at present and 10pc in 2014.
Modi of course has been denying charges by the opposition that there is jobless growth in the country. He cited a recent study to indicate that seven million jobs had been created in India in fiscal 2018.
The ILO maintains that new jobs created in South Asia over the next two years would be of inferior quality. Informality affects around 90pc of all workers in India, Nepal, Bangladesh and Cambodia, says the report. This undermines the prospects of reducing working poverty.
In India, for instance, about 400m of the total labour force of 535m would have poor quality jobs.
Besides trying to provide opportunities for the youth in different segments, the Indian government is also expanding the reach of skills development programmes across the country.
Its Pradhan Mantri Kaushal Kendras have been extended to nearly 500 districts (out of a total of about 700 districts). The government is now setting up more Indian Institutes of Skills Development (IISDs).
Anant Kumar Hegde, the minister of state for skill development and entrepreneurship, points out that there will be several IISDs on the lines of the Indian Institutes of Management and Indian Institutes of Technology. “We will soon have several IISD’s to meet the skill requirements of the country,” he adds.
According to the minister, many of the qualified personnel in the country are also unemployable. For instance, just a fifth of the country’s 1.5m engineers can be employed by industry. “This is a big challenge and could limit our growth,” he warns.
The first IIS was set up in Kanpur more than a year ago, and over the past three months seven new ones have been set up. Today, there are a dozen such institutions and every state now would have its own institute, offering courses through public-private partnerships.
Published in Dawn, The Business and Finance Weekly, January 29th,2018
