The term “employment” refers to the activity of engaging in paid work, or labour performed for payment. It entails a written contract between the employer and the employee, whereby the employee commits to serving the employer in exchange for payment.
Statistics
Employment Rate: According to CMIE, Employment rate in india is 44.70%. About 68.5 percent of all jobs in India are in rural areas. In the last five years, this percentage has slightly risen from 68%. However, rural India saw a nearly 80% increase in employment in December 2022 as per reports of CMIE.
Unemployment Rate: According to data from the Centre for Monitoring Indian Economy (CMIE), the unemployment rate in India was 8.4% in urban areas while 7.5% in rural during March 2023.
Labour Force Participation Rate: According to CMIE, India’s labour force participation rate (LFPR) in December 2022 was 40.7%.According to the most recent Annual PLFS Reports, the expected Labour Force Participation Rate (LFPR) on ordinary status for women aged 15 and over in the nation was 30.0%, 32.5%, and 32.8% during 2019–20, 2020–20, and 2021–20, respectively. This data illustrates an upward trend. When compared to male LFPR, it is still a very small amount.
Types of Employment
- Formal Employment: Work that is covered by social security and labour legislation is referred to as formal employment. Formal employees frequently have contracts, are paid regularly, and are eligible for benefits like health insurance, retirement plans, and paid time off. Larger, more reputable businesses and organizations frequently offer this kind of job.
- Informal Employment: Work that is not subject to social security or labour rules is considered to be in the category of “informal employment.” Unregistered small companies and independent contractors are two options for informal employment. Workers in unregulated industries may earn low salaries and endure subpar working conditions, and there is frequently no job security, no benefits, and no legal rights.
- Self-employment: A self-employed person works for oneself, as opposed to a business or organisation, in this sort of employment. Freelancers, consultants, and small-business proprietors are all examples of self-employed people. They are in charge of their own taxes and benefits, and they can work either full- or part-time.
- Gig Employment: A gig employment arrangement is a sort of employment where people work on temporary, contract-based projects rather than being engaged on a long-term basis. Although it permits some flexibility with regard to working hours and location, it can not provide the same stability and advantages as regular employment. With the growth of internet platforms that link employees with customers or clients, the gig economy has expanded dramatically in recent years.
- Internship: An internship is a type of employment created to give people the chance to obtain real-world experience in a particular subject or business. It provides an organised learning environment under the direction of experienced professionals and is frequently aimed at students or recent graduates. The goal of internships is to improve the participant’s comprehension of an organization’s culture, operations, and industry-specific practices. Paid or unpaid internships can be a stepping stone to more permanent employment or advantageous networking opportunities.
Opportunities
- Demographic Dividend: With a median age of 28 years, India has a sizable and youthful labour force. As young people join the workforce and contribute to the economy, there is therefore a significant opportunity for employment.
- Economic expansion: With a GDP growth rate of about 6-7% in recent years, to becoming the 5th largest economy of the world. And aim of the Government is to become a 5 trillion economy. India has been one of the world’s main economies that has grown the fastest. This expansion has prompted increased investment, the construction of infrastructure, and the creation of jobs across a number of industries.
- Workforce with skill: India has a sizable pool of educated and competent workers, especially in industries like IT, engineering, and healthcare. This offers a solid base for the growth of high-skilled industries and jobs.
- Government initiatives: The Indian government has started a number of programmes and missions to encourage entrepreneurship and employment, including the Make in India campaign, the Startup India programme, and the Skill India mission. These programmes seek to improve skills, foster creativity, and open up new career prospects.
- Developing Industries: India is experiencing growth in a number of developing industries, including digital technologies, renewable energy, and e-commerce. Future employment prospects are anticipated to be strong in several industries.
Challenges
- Underemployment: Underemployment occurs when people are working but not to the fullest extent possible or in positions that do not correspond to their abilities and credentials. Reduced job satisfaction, decreased productivity, and slower economic growth can result from this.
- Lack of Uskilling and Re-skilling: The skills needed in the workforce are continually changing as technology develops. And upskilling and re-skilling should be industry relevant. This has made it difficult for those looking for work because they might not have the abilities required for the positions that are available. For people to stay competitive in the labour market and to fill the skill gaps that businesses are encountering, upskilling and reskilling are becoming more and more crucial. Lack of suitable skills may result in underemployment or unemployment without adequate upskilling and reskilling.
- Informal Employment: Employment that is not covered by social security or labour rules is referred to as being in the “informal” sector of the labour market. Low pay, little benefits, and insecure employment are common characteristics of informal labourers. Increased poverty and social inequality may result from this.
- Industrial Linkage: Establishing industrial links can be difficult for employment because it calls for cooperation and coordination across several industries and stakeholders. Without the right connections, industries might not be able to recognise and adapt to the shifting demands of the labour market, which would result in a mismatch between skills and employment prospects.
- Poor Working Conditions in the Informal Sector: The informal employment sector may not be covered by labour regulations, which can lead to subpar working conditions and worker exploitation. This can pose a problem for employment since it may result in a lack of motivation and trust among employees, which may have an impact on their output and general job happiness. To address this issue, a coordinated effort to uphold labour regulations and give employees greater benefits.
Way Forward
- Education, training & Skilling: These three factors are crucial for resolving skill gaps and enhancing employability. Governments can fund educational, training and Skilling initiatives that equip people with the skills, abilities and information required for professions of the future. To help employees increase their skills and productivity, employers can offer them opportunities for training and development. Skill India initiative is one of example which makes people access to learn skills through it.
- Reforms to the labour market: Labour market reforms, such as those that support formalization and the protection of employees’ rights, can serve to strengthen the regulatory environment for employment. Governments can implement policies to loosen up the labour market, like lowering hiring and firing restrictions and boosting flexibility in working conditions.
- Four new labour codes were passed by the government in an effort to update the current labour laws and regulate employee-employer relations. The Industrial Relations Code, Code on Wages, Code on Occupational Safety, Health, and Working Conditions, and Code on Social Security all comprise the codification of 29 pre-existing labour legislation. With the introduction of the Minimum Wages Code, workers are now able to first demand minimum pay. To give employees a safe workplace, 13 laws are combined into the Occupational, Safety, Health and Working Conditions Code. By combining three labour laws, the Industrial Relations Code safeguards workers’ and unions’ interests and helps prevent future conflicts. The Social Security Code includes nine pre-existing laws that grant access to pensions, maternity benefits, insurance, and other security schemes.
- Infrastructure and spending on Innovation: Infrastructure and innovation spending can spawn new businesses and employment possibilities. Governments can fund infrastructure projects like telecommunications, energy, and transportation networks to promote economic expansion and employment creation. The development of new technologies and industries as a result of investment in research & development may also result in the creation of new job opportunities.
- Incentivising MSME: Governments can aid in the growth of small businesses and entrepreneurship by implementing policies and programmes that facilitate access to capital, grant incentives, offer business development assistance, and provide regulatory guidance. This could support economic expansion and the creation of new job opportunities. Start-Up India initiative is one of the best initiatives by the government to support young and new Entrepreneurs who are starting it small.
- Job sharing and flexible working schedules: These practices can help people with care giving responsibilities or impairments find career opportunities and enhance work-life balance. Governments can enact regulations that encourage job sharing and flexible work hours, part-time employment, and telecommuting.
- Increasing women’s participation: By enlarging the skill pool available, increasing women’s participation in the labour force can assist combat the issue of unemployment. Additionally, it can encourage inclusion and diversity in the workforce and support economic growth by boosting consumer purchasing. Additionally, it may result in increased gender equality and female empowerment
