Editorial Articles

Volume-48, 24 February-2 March, 2018


Government Schemes to Tap Employment Potential in Various Sectors

Arun Khurana

 Aperson engaged in a job, is called an employed person. He may be engaged in agriculture or business or profession or service. In India, a person working 8 hours a day for 273 days in a year is regarded as employed on a standard person year basis. Thus, a person to be called an employed person must get meaningful work for a minimum of 2184 hours in a year. The person, who does not get work for this duration, is known as a unemployed person.

Sectoral distribution of employment

Broadly, an economy is classified into primary sector, secondary sector and tertiary sector. Agriculture and allied activities like forestry, fishing, dairying, mining and quarrying are the economic activities of the primary sector. Manufacturing, electricity, gas, water supply and construction constitute the secondary sector. The tertiary sector, also known as the service sector, includes trade, transport, storage, communication, financial services, social and personal services.

Employment in organized and unorganized sectors

The Indian economy is divided into organized and unorganized sectors. The unorganized sector in this country is quite large. Whole of the agriculture is in unorganized sector. Besides agriculture, most of the mining, constructions, trade, transport and communication, social and personal services are also in the unorganized sector. By and large, organized sector is restricted to manufacturing, electricity and financial services.

Rural and urban employment

In rural sector, most of the employment is in agricultural and allied activities. Employment away from agricultural and primary activities, towards secondary and tertiary sector is rather small. In urban sector, most of the employment is in secondary and tertiary sectors. It implies that in urban areas, most of the people are engaged in business, whether manufacturing or trading, profession and service. During the 1980s and thereafter, there is a shift of employment from rural to urban sectors, i.e., from primary to secondary and tertiary sectors.


The size of employment in a country depends to a great extent on the level of development. Therefore, when a country makes progress and its production expands, employment opportunities grow. In India, during the past three decades or so, production has expanded in all the sectors of economy. However, during the planning period, unemployment in absolute terms has increased. This has happened because during the first three decades of economic planning, trend rate of growth was considerably lower than the targeted rate. Therefore, jobs in adequate number were not created. Further, economic growth by itself does not solve the problem of unemployment. Prabhat Patnaik has succinctly remarked, "A higher arithmetical figure of growth rate is neither a necessity nor sufficient condition for alleviation of unemployment".

Conflict between growth and employment is inherent in the Mahalanobis strategy which guided India's development efforts for about two decades. Basic assumption of economic planning in India was that growth would automatically solve the unemployment problem. However, this was not to be so. Since the adoption of neo-liberal economic policies in India over the past one and a half decades, the government's obsession with the high rate of economic growth has made it completely oblivious to possible conflict between economic growth and employ-ment. Hence, in recent years, growth in India has been mostly "job Iess" and sometimes even "job loss". This is substantiated by the fact that during the 1990s and early years of the current decade, unemployed has increased.


"Kisaano ki Samriddhi", the well-being of farmers is vital to the nation's prosperity. Kisan is the sentinel of our food security. Annadaata Sukhibhava has been one of our fundamental civilizational values. It is the time the government is taking several steps to usher in Second Green Revolution in the entire country. India lives in the villages. Agriculture sector is the soul of Indian economy and for the people of India.

The share of agriculture in employment was 48.9 per cent of the workforce. In other words Agriculture is the principal source of livelihood for more than 58% of the population of this country. As per the Economic Survey the sector share in the Gross Domestic Product (GDP) was 17.4 in 2015-16.

We all know that the agriculture sector is the backbone and crucial in our Indian economy which provides the basic ingredients to mankind and raw material for rapid industrialisation sector development. No doubt that besides manufacturing sectors, agriculture sector provides great employment opportunities for rural people/youth on a large scale for their livelihood and also provides an entrepreneurship.

The agriculture sector continues to be a fundamental source of employment and income generation in India.

With an estimated growth rate of about 2.5 per cent, about four million new rural workers are added to the labour force annually imposing a serious challenge to policy makers to address the need for employment generation.

Improvements in agricultural productivity can significantly absorb this work force but this alone will not meet the current challenge of a bludgeoning labour force.

What could address this challenge is a demand led diversification into high value agricultural activities such as horticulture and livestock rearing.

Diversification of agriculture into high value agri-business is expected to generate a second wave of economic growth and employment generation in the agriculture sector.

One can identify four clear trends that can augment agricultural diversification such as:

(1) The economic weight of high value agricultural produce (such as horticulture and livestock produce) in the domestic food economy is increasing;

(2) Domestic demand for processed and value-added food products is increasing;

(3) The global food economy is increasingly becoming an open market place forging new avenues for Indian food products;

(4) Globally, trade in value-added food products is gaining importance over agricultural raw material. Importantly, most food products in this are either perishable produce or are processed food products.

These trends signify that the economic weight (value-added and employment generation) of agriculture is likely to shift in two directions:

Horizontally within the farming sector from cultivation of basic food produce (such as cereals and pulses) to high-value farming activities (such as horticulture and livestock farming).

Clearly, two value propositions that open up huge opportunities for rural incomes and employment generation are: (1) Diversification into high-value produce on farm - such as fruits and vegetables and live stock products including animal husbandry, and (2) Food processing as a rural non-farm activity.


The manufacturing sector is widely regarded as the transformational sector, for agricultural labourers to move from low skilled to more value added jobs. This is because, historically, economic development has followed a pattern of pulling people out of agriculture, moving them into non-farm activities such as manufacturing and services. The importance of the role of manufacturing (industrial sector) in absorbing surplus labour from agriculture sector has also been proved by the development experience of many developed countries and lately in various South East Asian countries.

This makes manufacturing extremely important for India, where agriculture constitutes a minor share of GDP, but accounts for a disproportionately large share in employment.

An abundant supply of people in the working-age group has the potential to boost manufacturing growth. However, to absorb much of this labour force, there is a need to lay larger emphasis on building strong human capital. This is important considering that certain manufacturing industries, such as transport equipment, petroleum and electrical machinery, require specialised training, which can be met only by skilled labour force.

According to a study recently conducted by global management consulting firm McKinsey and Company, the Indian manufacturing industry is expected to touch US$ 1 trillion by 2025. Industry experts accredit the increasing demand of manufacturing units and the penchant for setting up low-cost plants in India by multinational firms for this possible development.

Around 90 million domestic jobs are waiting to be created by that timeframe with the manufacturing segment contributing about 25-30% of India's gross domestic product. India's rapidly expanding economy is giving both international entrepreneurs and home players an array of opportunities to venture out and grow.

Key market drivers for the Indian Manufacturing Industry:

1)  The Indian manufacturing sector has been witnessing a sluggish growth due to deceleration in investment.

2)  The national manufacturing policy suggests raising the share of manufacturing in GDP to 25% in order to create 100 million jobs in the coming decades.

3)  Additional capacities are being planned to be installed in all the major manufacturing units.

4)  A public procurement policy has been proposed incorpora-ting technology along with common facility centres while the Khadi Mark steps has been launched to promote Micro Small and Medium Enterprises.

To give a boost to the manufacturing sector growth and to make the sector globally competitive, the government had announced the National Manufacturing Policy in 2011. The policy envisaged enhancing the share of manufacturing to GDP from 16 to 25 per cent and to create 100 million jobs by 2022. The policy envisages the Centre to provide an enabling framework and incentives for infrastructure development on a PPP mode and the State Governments to be encouraged to adopt the instrumentalities provided in the policy viz; setting up of National Investment and Manufacturing Zones, rationalization and simplification of business regulations, incentives for small & medium enterprises, industrial training and skill up gradation measures among others. However, the manufacturing sector growth continued to be a cause of concern. With nearly 63 per cent of the population in the working age group (15-64 years) the Prime Minister in his Independence Day Speech in 2014 invited the world to 'Make in India', 'Manufacture in India' and indicated that growth of manufacturing sector is must for employment generation of the youth.

Make-in-India and job creation:

The Make in India initiative announced officially in September 2014, aims to facilitate investment, foster innovation, enhance skill development, protect intellectual property and build best in class manufacturing infrastructure and convert India into a manufacturing hub of the world. In this paper an attempt has been made to see the employment potential of the Make in India initiative.

The "Make in India" initiative 7 focuses on 25 key sectors and is based on four pillars, which have been identified to give boost to entrepreneurship in India, not only in manufacturing but also other sectors. The four pillars are:

New Processes: 'Make in India' recognizes 'ease of doing business' as the single most important factor to promote entrepreneurship. A number of initiatives have already been undertaken to ease business environment.

New Infrastructure: Govern-ment intends to develop industrial corridors and smart cities, create world class infrastructure with state-of-the-art technology and high-speed communication. Innovation and research activities are supported through a fast paced registration system and improved infrastructure for IPR registration. The requirement of skills for industry are to be identified and accordingly development of workforce to be taken up.

New Sectors: FDI has been opened up in Defence Production, Insurance, Medical Devices, Construction and Railway infrastructure in a big way.

New Mind set: In order to partner with industry in economic development of the country Government shall act as a facilitator and not a regulator.


India's services sector has remained resolute and on a steady rise. According to a recent report published by the Confederation of Indian Industry (CII) and KPMG, India has moved up to become the fastest growing service economy in the world. The services sector is a dominant sector in India's GDP, with attractive foreign investment flows and contributing significantly to exports.

The Indian services sector has attracted the highest amount of Foreign Direct Investment (FDI) inflows. We have witnessed good revenue generation with growing sectoral activities across trade, tourism, healthcare, transport, communications, information technology, finance, insurance, real estate, business services, social and personal services. The factors leading to this rapid rise are obvious. Increasing purchasing power, rising social mobility and digital penetration to rural markets are creating a spurt in demand for the services sector in India.

The contribution of the services sector has increased very rapidly in India's GDP, with many foreign consumers showing interest in the country's service exports. This is attributed largely to our country's pool of highly skilled, low cost and educated manpower. Foreign companies are outsourcing their work to India especially in the area of business services, including business process outsourcing and information technology services. This has given a major boost to the services sector in India, which in turn has increased the services share in the GDP pie.

The Government of India recognizes the importance of promoting growth in this area and is creating an enabling environment that will give a further push to sectors such as healthcare, tourism, communications, information technology, among others. An encouraging regulatory framework and an easing of trade barriers at both domestic and international levels through agreements will only enhance India's competitiveness at a global level. This will also mean an increase in the quality of employment and not just numbers. This will lead to a quality labour force for the country.

The multiplier effect on ancillary industries owing to the growth in the services sector is a natural outcome. For instance, a spurt in tourist arrivals into India will not only positively impact the hotel and airlines industries but also boost the sale of crafts and artifacts that can be showcased as part of integrated business plans between stakeholders, both private and public. The regulatory framework also needs to take into account the evolving nature of the services sector, and how it's interlinked with other sectors.

India's services sector, while generating high income, is still low on generating employment as per the ILO's Global Employment Trends 2016. However, the Indian healthcare sector has grown to become one of the largest sectors in the services industry in terms of both revenue and employment generation. Healthcare essentially comprises hospitals, medical devices, clinical trials, outsourcing, telemedicine, medical tourism, health insurance and medical equipment. This sector in India is growing at a brisk pace due to its increasing coverage, services and growing investments by public as well as private players. Due to the diverse range of medical services, this sector impacts tertiary industries by virtue of indirect employment to healthcare professionals such as nurses, residential associates and medical assistants.

Government is taking conscious steps to engage with other nations to give a further fillip to the services sector. India has signed comprehensive bilateral agreements with the  Singapore, South Korea, Japan and Malaysia. A Free Trade Agreement (FTA) in services and investment was also signed with the Association of South East Asian Nations (ASEAN).

With the right regulatory and policy framework and creating a climate that will ease the way of doing business, this industry can leapfrog to achieve substantial growth. Significant efforts in this direction are already underway. The first ever Global Exhibition on Services (GES), inaugurated by Prime Minister Modi, was held in April 2015 in New Delhi, providing a platform for all the participants, delegates, business visitors and other key decision-makers from the services industry to interact with each other, and explore new business avenues. The success of GES resulted in a second edition that took place in April this year -- it focused on the services sector of the world economy and provided a platform to discuss and debate the future of India's services industry.

India's services sector is advancing rapidly and is now poised for a bigger slice of India's GDP. This is no ordinary achievement for a country which is predominantly dependent on agriculture. The accomplishment is even more commendable against the backdrop of challenges such as policy changes, a fragile world economic environment and raising growth capital.

We need to amplify our presence manifold in sectors where onshore and non-off-shore services are valued such as travel, transportation, healthcare, education, communi-cations and financial services. Services sector growth rate in India's GDP has indeed registered a significant growth over the past few years. With the support of the government, I am confident that we can further capitalize on the immense opportunity in this space and help contribute significantly towards India's growth


Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) 2005:

It was launched on February 2, 2005.  The Act provides 100 days assured employment every year to every rural household. One-third of the proposed jobs would be reserved for women.  The central government will also establish National Employment Guarantee Funds. Similarly, state governments will establish State Employment Guarantee Funds for implementation of the scheme. Under the programme, if an applicant is not provided employment within 15 days s/he will be entitled to a daily unemployment allowance.

Salient features of MGNREGA are:

*Right based framework

*Time bound guarantee of employment

*Labour intensive work

*Women empowerment

*Transparency and accounta-bility

*Adequate funding by central government

*National Food for Work Programme:

National Rural Livelihood Mission: Ajeevika (2011)

It is the skill and placement initiative of Ministry of Rural development. It is a part of National Rural Livelihood Mission (NRLM)-the mission for poverty reduction is called Ajeevika (2011). It evolves out the need to diversify the needs of the rural poor and provide them jobs with regular income on monthly basis. Self Help groups are formed at the village level to help the needy.

Pradhan Mantri Kaushal Vikas Yojana:

The cabinet on March 21, 2015 cleared the scheme to provide skill training to 1.4 million youth with an overall outlay of Rs. 1120 crore. This plan is implemented with the help of Ministry of Skill Development and Entrepreneurship through the National Skill Development Corporation. It focus on fresh entrant to the labour market, especially labour market and class X and XII dropouts.

National Heritage Develop-ment and Augmentation Yojana (HRIDAY):

HRIDAY scheme was launched on 21 Jan. 2015 to preserve and rejuvenate the rich cultural heritage of the country. This Rs. 500 crore programme was launched by Urban Development Ministry in New Delhi. Initially it was launched in 12 cities: Amritsar, Varanasi, Gaya, Puri, Ajmer, Mathura, Dwarka, Badami, Velankanni, Kanchipuram, Warangal and Amarvati.

These programmes are playing a very crucial role in the development of the all sections of the society so that the concept of holistic development can be ensured in the real sense.

National Career Service Portal

Government has launched National Career Counselling Portal in a bid to modernize all government-run employment exchanges. It was launched by Prime Minister Narendra  Modi under the aegis of         National Career Service(NCS) project of Union Ministry of Skill Development and Entrepreneurship.

The web portal is a one-stop platform for both job providers and job seekers where registration can be done online. It provides basic platform for searching and applying for jobs on the portal. It also provides candidates career-related counseling either by its helpline numbers or visiting these centres along with other facilities like job posting, aptitude assessment, job matching, training providers, skill courses and guidance on self-employment and entrepreneurship. It should be noted that NCS project aims at transforming all the government-run employment exchanges.

Pradhan Mantri Rojgar Protsahan Yojana

This is a new proposed scheme with the objective of promoting employment generation with the allocation of Rs. 1000 cr. Under the scheme employers would be provided an incentive for giving employment to additional (New) workers who have worked for 240 days during the financial year 2016-17.

Pandit Deendayal Upadhyay Shramev Jayate Karyakram

This scheme has been launched by NDA Government recently. Five schemes have been launched under this programme which aims both at creating a conducive environment for industrial development and doing business with ease and also expanding government support to impart skill training for workers. They are Shram Suvidha Portal, Universal Account Number, Random Inspection Scheme, Apprentice Protsahan Yojana and Revamped Rastriya Swasthaya Bima Yojana.

Skill Strengthening for Industrial Value Enhancement (STRIVE)  scheme

STRIVE scheme will incentivize ITIs to improve overall performance including apprenticeship by involving SMEs (Small Scale Enterprises), business association and industry clusters. It will develop robust mechanism for delivering quality skill development training by strengthening institutions- National Skill Development Corporation (NSDC), State Skill Development Missions (SSDMs), Sector Skill Councils, ITIs and National Skill Development Agency (NSDA) etc.

It will support universalization of National Skills Qualification Framework (NSQF) including National Quality Assurance Framework (NQAF) across skill development schemes. It will provide required push to National Skill Development Mission 2015 and its various sub missions. It is also aligned to flagship Government programs such as Make in India and Swachhta Abhiyan.

SANKALP scheme

SANKALP scheme envisages setting up of Trainers and Assessors academies with self-sustainable models. Over 50 such academies are to be set up in priority sectors. It will leverage institutions for training trainers in both long and short term VET thereby bringing about convergence. Additional trainer academies will also be set up.

It will focus on greater decentralization in skill planning by institutional strengthening at State level which includes setting up of SSDMs and allow states to come up with State and District level Skill Development Plans (SSDPDSDP).

The scheme also aims at enhancement of inclusion of underprivileged and marginalized communities including women, Scheduled Castes (SCs)/ Schedule Tribes (STs) and Persons with Disabilities (PWD). It will also develop a skilling ecosystem that will support the country's rise in Ease of Doing Business index.

The thrust of Union Budget 2018 is likely to remain on creating more jobs in India and boosting farmer's income this fiscal year, findings of the Economic Survey India suggested. The survey found that climate change is likely to increase the burden on already stressed agro economy, as it urged the government to take "radical follow-up action" to achieve its goal of doubling farmers" income by 2022.

(The Author is Director, Social Responsibility Council; email: khurana@arunkhurana.com. Views expressed are personal)