The employment-income crisis

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Source: The post is based on an article “The employment-income crisis” published in the Business Standard on 8th August 2022.

Syllabus: GS 3 Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development, and Employment.

Relevance: Jobless growth in India and associated reforms

News: India is the fastest growing large economy in the world. However, the Indian Economy is facing a number of challenges.

What are the challenges to addressing the employment-income crisis?

India is facing the biggest crisis of the unemployed and unemployable graduates, or secondary school drop-outs. This has caused disaffection among youth.

Some Measures Taken to solve the crisis

Education: Today, 50.2% of men and 41.0% of women have 10 or more years of schooling in the 15-49 age group.

Skilling: (1) Sector Skills Councils were set up from 2009-10 onwards. (2) The Ministry of Skill Development and Entrepreneurship was set up in 2014 with a strong focus on standardisation, and (3) Industrial Training Institutes (ITIs), polytechnics, and other skill-oriented institutions were brought on a common platform.

The states and districts are playing a vital role in the implementation of skill programs.

The government launched Skill Hubs linking schools to ITIs/polytechnics, apprenticeship/internship embedded courses, credit equivalence frameworks, and so on.

What are the issues in the measures taken so far?

The Comptroller and Auditor General of India, has pointed out that there has been misreporting of employment due to incentivized thrust on employment.

Colleges and high schools had some apprenticeship and vocational opportunities, but not on a transformational scale.

Some solutions to fight the challenges outlined above through a reform of the education–skill continuum

(1) There should be meaningful skilling for enterprises and jobs in the rural areas. For example, the promotion of high-value activities in the agriculture and allied sector. Basic IT and communication skills should be part of every skilling program.

For example, Madhya Pradesh has launched a pilot in some villages for full employment through the Livelihood Mission.

(2) There should be an education-skills continuum. Skilling should be linked with formal education. For example, there can be certificates, diploma courses, and bachelor’s degrees in vocational education like counseling, tourist guides, accountancy, IT skills, etc. Thus, BA/B.Sc./B.Com graduates can be made employable on a large scale with modest investments.

For Example, Tamil Nadu and Maharashtra have higher women’s work participation due to numerous technical and service-oriented institutions and courses.

(3) There should be a re-orientation of the ITIs and polytechnics. The focus should be on reskilling and upskilling through changes in curriculum development and course design.

(4) local governments and community organisations like women’s self-help groups (SHGs) and youth organisations should be involved in the skilling plan for a local area.

In addition, there should be a database of all men and women seeking employment or enterprise support for each and every local body, rural or urban.

(5) Skills and credit have to go hand in hand. The newly-trained individuals or groups who want to develop their enterprises must be provided with credit. There can be innovative technology-enabled financing through community collectives like community cadre of Bank Sakhis and Bank Mitras.

(6) Apprenticeship or skill programs managed by potential employers must be encouraged to enable a more need-based development of skills.

(7) The Rural Self Employment Training Institutes (RSETIs) should be leveraged in districts. They can run courses in partnership with the Krishi Vigyan Kendra (KVKs) like mechanisation and modernisation of agriculture and allied activities. Further, SHGs, farmers producer organisations (FPOs), primary agricultural cooperative societies, etc., can work with RSETIs for skill and credit linkage.

(8) The certification and assessment should be developed in accordance with the systems for higher education.


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