ForumIAS announcing GS Foundation Program for UPSC CSE 2025-26 from 10th August. Click Here for more information.
Centre prepares to redefine ‘employment’
Context
Panel to bat for ‘pragmatic’ approach to classify formal work
Job creation
The government’s own data showed that job creation in the formal sector was slowest in almost a decade, but it has said that it felt the ground reality on jobs was not being ‘properly’ captured as the existing system takes into account only the formal sector
Change in the offing
The situation could change soon. Speaking to The Hindu, commerce and industry minister Suresh Prabhu said “all the economic activity in India, including in the Micro, Small and Medium Enterprises (MSME) and informal sectors, will soon get properly captured.
Task Force on Improving Employment Data
A task force was set up in May 2017 under the chairmanship of the then Vice Chairman of NITI Aayog, Arvind Panagariya
- Terms of reference of the task force: The panel’s terms of reference included assessing the existing data systems and sources that provide information on jobs and job creation and then identifying alternate sources that could provide such data. The terms also included recommending mechanisms for capturing information on jobs and job creation on a regular basis for both the informal and formal sectors
- The panel had identified the Micro Units Development and Refinance Agency (MUDRA) scheme, which provides small, unsecured loans to enterprises, as an important source of job creation
Major recommendation
Among the main recommendations could be a change in the definition of employment/workers as well as ways to include and measure employment in the informal sector as well, he indicated.
What does the draft report say?
- According to the draft report, there is no fixed definition of formal workers currently in India
- It said all definitions were highly restrictive, and exclude many workers who have decent and steady jobs but either do not work in large enough enterprises or do not have written contracts. The task force said it was desirable to adopt a new, more ‘pragmatic’ definition of formal workers
