Growing Unemployment | Creation Of Urban Jobs Critical

The after effect of the pandemic looms large in the country with job creation being a critical challenge. Recently, the government’s quarterly urban Periodic Labour Force Survey (PLFS) and the Centre for Monitoring Indian Economy’s consumer Pyramids Household Survey has found India’s unemployment rate at 7.2% and 8% as of September and November respectively. This means, around 3.8-3.9 crore Indians of the working age population, who are willing and able to search for jobs, are not able to get one.

This is only part of the story as the total unemployed youths are not taken into consideration. Moreover, those who call themselves employed, may be working part-time and drawing a paltry remuneration. Joblessness plaguing the nation has got worse and despite promises the ruling dispensation needs to act. Another aspect requiring urgent attention is gender disparity. The female labour force participation is just 19%and even lower than a conservative Muslim country such as Saudi Arabia.

According to International Labour Organisation, gender discrepancy is enormous even within the well-educated sections of society. In 2019, only 30% of Indian females with tertiary education participated in the labour force as compared to around 81% males. Youth unemployment has also been increasing steadily. From 22% in 2019, it reached 28% in 2021 and will be perhaps 30% presently. But this figure is not quite indicative as it does also include youth who earn but not enough for a decent livelihood.

The PLFS indicates that around 47% of labour force works in the agriculture sector today as compared to 42.5% in 2019. This increase is not just a pandemic effect. Between 2018-19 and 2019-20, agricultural employment increased by 3.4 crore, whereas industry and services employment only grew by 93 lakhs. The government’s claim of creating 8 lakh jobs under this Scheme appears quite optimistic. And with subsidies being directed into capital-intensive industries, there seems less improvement as this offer little job potential.

By the middle of the decade, it’s estimated that 50-odd million job seekers will come into the labour market as already there of crores of youth yearning and hunting for jobs, any jobs. There is not much that can be expected from each of Performance-linked Incentive jobsas the the target is implausibly large to meet the need; it obviously can’t be the solution alone in the backdrop that a huge segment of unskilled and semi-skilled workers who don’t have adequate job opportunities, are those residing in rural areas.

In recent months, analysts have warned of lower formal sector employment and subdued rural wages which could prove to be a dampener on consumption. “Improving contact-intensive services amid stable urban consumption demand could continue at a slower pace for some more time,” says a report by Emkay Global Financial on the second quarter GDP data, adding its channel checks depict quite mixed demand trends during the recent festive season. The formal sector employment growth seems to be reducing, indicated by the sequential fall in new Employees Provident Fund Organisation (EPFO) payrolls and the Naukri Job index. Additionally, subdued real rural wage growth is expected to further impact rural consumption.

CRISIL, the analytical company providing ratings, research, and risk and policy advisory services has noted that while domestic demand has stayed relatively resilient so far, it would be tested next year by the current weakening industrial activity. Increasing transmission of interest rate hikes to consumers will also be a pressure point and rural income prospects remain dependent on vagaries of weather, it added. Some feel there is a lowering demand for MGNREGA jobs, which is debatable as rural economy is stagnating with depressed wages and with little or no likelihood of the demand picking up.

The government is trying to boost up industrial activity but there’s not much increase in industrial output. In fact, in October it had shrunk 4% to a 26-month low and forex reserves had fallen by $72 billion a year. Additionally, the government is not concentrating on the labour-intensive sector, where job potential is undeniably high.

From a development point of view, industry can be divided into a formal capital-intensive sector and an informal cottage industry sector. Capital seems to have got concentrated almost entirely in the former and labour in the latter. It has been seen that hardly any attractive job opportunities have opened up for unskilled and even semi-skilled workers except in the public sector. India continues to remain primarily agricultural, with over 60% of the workforce still trapped in that sector till the late 80s, which may be around 55% presently.

Meanwhile, the forecast for this year is not quite encouraging, rather worrying thereby retarding the possibility of a growth in employment opportunities. With domestic demand being insufficient, it is difficult to presume expansion of the labour-intensive industrial sector, which can actually generate job opportunities. Moreover, there is the resource crunch aspect of most States which are busy with rather unproductive welfare schemes and don’t have sufficient funds to promote industrial activity. However, it is time that industrial clusters with small and cottage industries should be encouraged.

Besides, district infrastructure is rather poor and needs to be improved vastly to encourage setting up of manufacturing units that could promote employment creation. Experts need to be consulted, and universities tapped so as to prepare and frame a realistic and achievable policy so that government aid could be extended to units that generate employment. Plus, the service sector should be given additional impetus as it is contributing to employment creation.

Finally, it needs to be emphasised that the government must create adequate employment opportunities to ensure that the social fibre of society is maintained, and that social disturbance is checked given that the youth may be waylaid to anti-social activities. In this context, the government may seriously think of starting an urban job scheme for the poor and the economically weaker sections, as has been suggested by many experts. Undoubtedly, lack of productive work has a negative effect on the socio-economic structure, more so with widening inequality in wages and incomes. Corrections need to be made. And urgently. —INFA


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