Background:

• The International Monetary Fund (IMF) has predicted that in five years from now, India’s GDP will have increased to $5.8 trillion and India will be the third largest economy of the world.
• Even then India will be the poorest nation among the large economies with per capita income expected to touch $4,281 by 2028-29. 
• Sustaining the healthy growth rates for going beyond this level is tough, considering that large sections of the labour force in the country continue to be trapped in low-productive jobs.
• Even as overall labour force participation, workforce participation and employment rates improved in India in recent years after showing long-term deterioration during 2000-2019, the employment conditions remain poor, according to the ‘India Employment Report 2024’ released by the Institute for Human Development (IHD) and International Labour Organisation (ILO).

Issues in India’s Employment scenario:

• High Informal Employment: A significant portion of the workforce, approximately 11 crore workers, is engaged in informal enterprises, which are often low-productive and low-earning.
  • The number of informal enterprises has increased over the years, from 5.76 crore in 2010-11 to 6.5 crore in 2022-23.
  • Informal enterprises typically hire fewer workers, with less than 15% hiring any workers as of 2022-23.
• Low Productivity and Earnings: Workers in informal establishments contribute significantly less value added (around Rs 1.4 lakh) compared to their counterparts in formal enterprises (Rs 15.04 lakh).
  • Wage growth in these informal jobs has barely kept pace with inflation, resulting in little to no real wage growth over the last decade.
• High Agricultural Employment: Approximately 23 crore workers are engaged in agriculture, a sector characterised by low productivity.
  • Combined with those in informal non-farm jobs, this accounts for nearly two-thirds of the labour force being in low-productive sectors.
• Limited Job Creation in Formal Sector: There is a lack of low or semi-skilled job opportunities in the more productive formal manufacturing sector.
  • Many workers lack the education to enter more skilled formal employment in both manufacturing and high-end services.
• Precarious Gig Economy Employment: In the absence of better job opportunities, many workers are turning to the gig economy, which offers precarious forms of employment.
  • Companies like Uber, Zomato, and Swiggy have become some of the largest employment generators in the country, indicating a shift towards gig-based jobs.
• Youth Employment Challenges: Youth employment is of poorer quality compared to adult employment, with a higher proportion of unpaid family work among youth.
  • The share of educated youths among the unemployed increased from 54.2% in 2000 to 65.7% in 2022, with women being disproportionately affected.
• Slow Transition to Non-Farm Employment: The transition to non-farm employment has slowed, with women largely accounting for the increase in self-employment and unpaid family work.

Government Measures for quality employment:

• National Education Policy (NEP): Overhauling the education system to make it more relevant and skill-oriented for future job markets.
• Pradhan Mantri Kaushal Vikas Yojana (PMKVY): Under Skill India Mission, providing skill-based training to youth, linking Short Term Training (STT) to placements and Recognition of Prior Learning (RPL) to recognizing existing skills.
• Employees’ Provident Fund Organisation (EPFO) Contributions: Government covering the employer’s contribution to EPF for new employees to encourage hiring.
• Production Linked Incentive (PLI) Schemes: Implementing with an outlay of Rs 1.97 lakh crore to create 60 lakh new jobs over five years.
• Pradhan Mantri Mudra Yojana (PMMY): Facilitating self-employment through collateral-free loans up to Rs 10 lakh for micro/small business enterprises and individuals.
• PM GatiShakti: A transformative approach focusing on infrastructure development in roads, railways, airports, ports, mass transport, waterways, and logistics to drive economic growth and create job opportunities.
• Deen Dayal Antyodaya Yojana-National Urban Livelihoods Mission (DAY-NULM): Aimed at reducing poverty and vulnerability of urban poor households by enabling them to access gainful self-employment and skilled wage employment opportunities.

Way Forward:

• Creating quality employment in adequate numbers requires the following: promoting job creation; improving employment quality; addressing labour market inequalities; strengthening skills and active labour market policies; and bridging the knowledge deficits on labour market patterns and youth employment.

https://indianexpress.com/article/opinion/columns/india-as-third-largest-economy-its-quality-of-jobs-that-will-determine-quality-of-life-9417384/ 

https://indianexpress.com/article/business/economy/indias-employment-conditions-continue-to-be-poor-report-9235126/