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Editorial Articles

Volume-42, 13-19 January, 2017

Future of Employment in India

Sasikalapushpa and DR. B. Ramaswamy

Employment generation is the key channel through which economic growth translates into prosperity for the population. In a growing economy, employment growth with rising productivity is the most effective mechanism available to the poor to participate in the growth process and raise their standard of living. High economic growth, therefore, unless accompanied by quality employment opportunities will raise inequalities and is therefore undesirable. Thus, gainful employment generation is the bedrock of attaining growth with equity and to alleviate poverty.
Rapid employment generation assumes even greater importance for India which is projected to be the youngest nation in the world in terms of size by the year 2020. As the Economic Survey 2015-16 puts it "To exploit its demographic dividend, India must create millions of good, safe, productive, well-paying jobs." Thus, employment matters to achieve growth with equity and to successfully meet the challenge of the impending demographic dividend.
Rizwanul, in 2004 Using the cross country data empirically demonstrates the link between poverty reduction and employment intensity of growth. He also employed cross country analysis to show the impact of employment and labour market related variables on poverty reduction and finds that structural transformation of employment towards manufacturing and other non-farm sectors, education and lowering of the dependency burden (i.e., increase in labour force participation) make a positive contribution to poverty reduction. In the short run, the sectoral productivity and employment pattern of growth may have important implications for poverty alleviation. Employment-intensive growth in the secondary sector is associated with reduction in poverty.
India's working age population (15-64) will hit 1.1 billion in 2050 while China's will decline to 750 million by then. India needs to create 16 million jobs annually for the next 15 years so as not to have this dividend turn into a disaster.
According to Economic Survey 2017, informal and unorganised sector dominated the labour market which is short of skilled labour. It said that informal sector has seasonal employment which is characterized by high levels of under employment, skill shortages and has rigid labour laws.
NITI Ayog asserted that voluntary unemployment is rising because people choose not to work below a certain income level after investing in education.
NSSO 5th Employment and Unemployment survey 2015-16:
Labor Force Participation Rate for different categories on all India basis based on UPS (Usual Principle Status) approach is as below:
The United Nations International Labour Organisation (ILO) released its 2017 World Employment and Social Outlook report, which finds economic growth trends lagging behind employment needs and predicts both rising unemployment and worsening social inequality throughout 2017.
Sector           Male              Female        Transgender        Person
Rural               77.3%              26.7%              51.1%                         53.0%
Urban              69.1%              16.2%              41.2%                        43.5%
 Rural+Urban  75.0%            23.7%             48.0%                     50.3%
With females comprising a significant proportion of the total working age population, such low female Labour Force Participation Rates (LFPRs) pose challenges for both equity and efficiency.
The unemployment rate for different categories based on UPS approach in percentage is given below:
Sector           Male  Female        Transgender  Person
 Rural              4.2%    7.8%              2.1%                      5.1%
 Urban             3.3%     12.1%           10.3%                    4.9%
 Rural+urban   4.0%  8.7%              4.3%                     5.0%
As the government alone cannot provide employment it focused on campaigns like Make in India, Startup India, Standup India, and Mudra Yojana etc., to make India as a hub of manufacturing and entrepreneurship.
It is a campaign Aaimed at transforming India into a global design and manufacturing hub. Make in India was launched by Prime Minister Narendra Modi and quickly became a rallying. Cry for India's innumerable stakeholders and partners. It was a powerful, galvanising call to action to India's citizens and business leaders, and an invitation to potential partners and investors around the world. But, Make in India is much more than an inspiring slogan. It represents a comprehensive and unprecedented overhaul of out-dated processes and policies. Most importantly, it represents a complete change of the Government's mindset - a shift from issuing authority to business partner, in keeping with Prime Minister's tenet of 'Minimum Government, Maximum Governance'.
Startup India is a flagship initiative of the Government of India, intended to build a strong eco-system for nurturing innovation and Startups in the country that will drive sustainable economic growth and generate large scale employment opportunities. The Government by this initiative aims to empower Startups to grow through innovation and design. The Action Plan of Startup India is based on the following three pillars:
a)         Simplification and Handholding
b)         Funding Support and Incentives
c)         Industry-Academia Partnership and Incubation
To promote entrepreneurship among SC/ST and women under tagline of "Karen prayas, Paye Vikas". The objective of the Stand-Up India Scheme is to facilitate bank loans between 10 lakh to 100 lakh to atleast one Scheduled Caste (SC) or Scheduled Tribe (ST) borrower and atleast one Woman borrower per bank branch of all scheduled commercial banks for setting up a greenfield  enterprise.
The Stand-Up  India  portal  provides  a  digital platform based on 3 pillars to support enterprises promotion among entrepreneurs from SC, ST and Women category through 1: Handholding support 2. Providing Information on financing 3. Credit Guarantee The program is governed by the Small Industries Development Bank of India (SIDBI) in collaboration with the Federation of the Dalit Indian Chamber of Commerce and Industry (DICCI) and several sector-specific institutes all across the country. The premises of SIDBI and National Bank for Agriculture and Rural Development (NABARD) are allowed as Stand-Up Connect Centers (SUCC). The loan will be backed by National Credit Guarantee Trustee Company.
Micro Units Development & Refinance Agency Ltd. (MUDRA) is a new institution set up by the Government of India to provide funding to the non-corporate, non-farm sector income generating activities of micro and small enterprises whose credit needs are below Rs.10 Lakh.
Under the aegis of  Pradhan Mantri  MUDRA Yojana (PMMY), MUDRA has created three products i.e. 'Shishu', 'Kishore' and Tarun' as per the stage of growth and funding needs of the beneficiary micro unit. These schemes cover loan amounts as below:   -
Shishu: covering loans up to Rs.50,000
Kishore: covering loans above Rs.50,000 and up to Rs.5,00,000
Tarun: covering loans above Rs.5,00,000 and up to Rs.10,00,000
All Non-Corporate Small Business Segment (NCSBS) comprising of proprietorship or partnership firms running as small manufacturing units, service sector units, shopkeepers, fruits/vegetable vendors, truck operators, food-service units, repair shops, machine operators, small industries, food processors and others in rural and urban areas, are eligible for assistance under MUDRA. Bank branches would facilitate loans under Mudra scheme as per customer requirements and loans under this scheme are collateral free loans.
National Skill Development Mission:
The Mission has been developed to create convergence across sectors and states in terms of skill training activities It is implemented through a streamlined institutional mechanism driven by Ministry of Skill Development and Entrepreneurship (MSDE). Key institutional mechanisms for achieving the objectives of the Mission have been divided into three tiers, which consist of a Governing Council for policy guidance at apex level, a Steering Committee and a Mission Directorate (along with an Executive Committee) as the executive arm of the Mission.
Mission Directorate supported by three other institutions: National Skill Development Agency (NSDA), National Skill Development Corporation (NSDC), and Directorate General of Training (DGT) - all of which will have horizontal linkages with Mission Directorate to facilitate smooth functioning of the national institutional mechanism. Seven sub-missions have been proposed initially to act as building blocks for achieving overall objectives of the Mission. They are:
Institutional Training, (ii) Infrastructure, (iii) Convergence, (iv) Trainers, (v) Overseas Employment, (vi) Sustainable Livelihoods, (vii) Leveraging Public Infrastructure.
Pradhan Mantri Kaushal Vikas Yojana (PMKVY):
Pradhan Mantri Kaushal Vikas Yojana (PMKVY) is the flagship scheme of the Ministry of Skill Development & Entrepreneurship (MSDE). The objective of this Skill Certification Scheme is to enable a large number of Indian youth to take up industry-relevant skill training that will help them in securing a better livelihood. Individuals with prior learning experience or skills will also be assessed and certified under Recognition of Prior Learning (RPL). Under this Scheme, Training and Assessment fees are completely paid by the Government.
Startup village Entrepreneurship programme (SVEP):
To create sustainable self-employment opportunities for youths residing in selected villages. The objective is also to promote networking of banks and financial institutions with village entrepreneurs.
National Urban Livelihoods Mission (NULM) was launched by the Ministry of Housing and Urban Poverty Alleviation (MHUPA), in 2013 by replacing Swarna Jayanti Shahari Rozgar Yojana (SJSRY).The NULM will focus on organizing urban poor in their strong grassroots level institutions, creating opportunities for skill development leading to market-based employment and helping them to set up self-employment venture by ensuring easy access to credit. The Mission is aimed at providing shelter equipped with essential services to the urban homeless in a phased manner. In addition, the Mission would also address livelihood concerns of the urban street vendors by facilitating access to suitable spaces, institutional credit, social security and skills to the urban street vendors for accessing emerging market opportunities.
Aajeevika - National Rural Livelihoods Mission (NRLM) was launched by the Ministry of Rural Development (MoRD), Government of India in June 2011. Aided in part through investment support by the World Bank, the Mission aims at creating efficient and effective institutional platforms of the rural poor, enabling them to increase household income through sustainable livelihood enhancements and improved access to financial services. NRLM set out with an agenda to cover 7 crore rural poor households, across 600 districts, 6000 blocks, 2.5 lakh Gram Panchayats and 6 lakh villages in the country through self-managed Self Help Groups (SHGs) and federated institutions and support them for livelihoods collectives in a period of 8-10 years.
In addition, the poor would be facilitated to achieve increased access to rights, entitlements and public services, diversified risk and better social indicators of empowerment. DAY-NRLM believes in harnessing the innate capabilities of the poor and complements them with capacities (information, knowledge, skills, tools, finance and collectivization) to participate in the growing economy of the country. NRLM implementation is in a mission mode. This enables (a) shift from the present allocation based strategy to a demand driven strategyenabling the states to formulate their own livelihoods-based poverty reduction action plans, (b) focus on targets, outcomes and time bound delivery, (c) continuous capacity building, imparting requisite skills and creating linkages with livelihoods opportunities for the poor, including those emerging in the organized sector, and (d) monitoring against targets of poverty outcomes.
Atal Innovation Mission:
Atal Innovation Mission (AIM) including Self-Employment and Talent Utilization (SETU) is Government of India's endeavour to promote a culture of innovation and entrepreneurship. Its objective is to serve as a platform for promotion of world-class Innovation Hubs, Grand Challenges, Start-up businesses and other self-employment activities, particularly in technology driven areas.
The Atal Innovation Mission shall have two core functions:
*Entrepreneurship promotion through Self-Employment and Talent Utilization, wherein innovators would be supported and mentored to become successful entrepreneurs
*Innovation promotion: to provide a platform where innovative ideas are generated.
A National ICT based portal has been developed primarily to connect the opportunities with the aspirations of youth. This portal facilitates registration of job seekers, job providers, skill providers, career counsellors, etc.
The portal provides job matching services in a highly transparent and user friendly manner. These facilities along with career counselling content will be delivered by the portal through multiple channels like career centers, mobile devices etc.
The project would be capable of meeting the varied demands and requirements of the youth for information on education, employment and training and will be supported by a multi lingual call center.
National SC/ST hub:
The National SC/ST Hub has been set up to provide professional support to Scheduled Caste and Scheduled Tribe Entrepreneurs to fulfill the obligations under the Central Government Public Procurement Policy for Micro and Small Enterprises Order 2012, adopt applicable business practices and leverage the Stand Up India initiative.
The Hub would be implemented by the Ministry of MSME through National Small Industries Corporation (NSIC), a public sector undertaking under the administrative control of the Ministry of MSME.
*Re-energising of micro, small and medium industries, as they provide a quarter of all jobs.
*Government should reduce the skill mismatch in the market and also gender based wage gaps in different sectors
*The government needs to undertake further reforms to simplify business and should provide tax and business incentives, especially to young business entrepreneurs, as also to the SMEs.
*Government should focus on sectors such as education, healthcare, hospitality and tourism. They all need policy changes to spur growth and realise their massive employment potential.
*The government needs to focus on each employment generating sector separately.
*Developing infrastructure through massive public expenditure on railway stations, metres, ports and national highways
*Integrating the employment generation schemes with SMART city mission, AMRUT, Housing for all etc., gives a massive push for employement generation.
*Creation of coastal employment zones
*3 ways for job creation as proposed by a recent report.
More appropriate statiscal measurement of employment, removing hurdles in the way of investment and innovation, building industrial townships, focusing on manufacturing, and the development of tourists circuits.
Dr. Sasikalapushpa is Member of Parliament (Rajya Sabha) & has also Co- authored four books with Dr. Ramaswamy.
Dr. B. Ramaswamy is former Pro Vice Chancellor APG Shimla University Himachal Pradesh.