Unemployment in india

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Context: It is for the first time that unemployment in india has become a big issue in Bihar assembly elections.

What are the issues?

  • Impact of lockdown: The economy contracted severely, Bihar saw millions of poor migrant labours returning home as U.P. and Bihar have a disproportionately high number of out-migrants.
  • Joblessness an issue this election: An opposition leader promised 10 lakh government jobs in his first Cabinet meeting, if made Chief Minister; the Janata Dal (United)/BJP countered him by promising to create 19 lakh new jobs.
  • Labour force: For nearly 10 years after 2003, GDP growth averaged more than 7% per annum. Non-agricultural jobs in India were generated at a rate of 7.5 million per annum. But only 2 million of the youth were joining the labour force (as enrolment in schools/ colleges was increasing).
  • New non-agricultural jobs pulled over 5 million per annum out of agriculture and into construction and other work, where Bihari and U.P. labour got absorbed in large numbers.
  • Demonetisation and the reluctance to competently handle the non-performing assets crisis sent the economy into a downward spiral.
  • Unemployment rise: The number of unemployed educated youth and a disheartened labour force (youth who completed education and training but were still neither in jobs nor searching for jobs actively) increased to unprecedented levels by 2018.
  • Self-employment decline: It is clear that despite the government’s measures (example, MUDRA) to promote self-employment, the number of youths engaged as self-employed declined from 81 million to 63 million between 2005 and 2012 and further to 49 million between 2012 and 2018.
  • This is despite 95% of MUDRA loans being in the smallest Shishu category. The Ministry of Labour’s MUDRA study in 2018 had already demonstrated this fact.
  • Actual government jobs: Only about 7% of the total employment is created in the government, including the public sector undertakings (NSS, 2017-18).
  • Of the total 465 million jobs in India, about 260 million are created in non-farm (in the industry and services) sectors, of which only 34 million are created in the government sector.
  • The Central government tried to create a myth that the self-employed can create enough jobs.

What are the steps to be taken?

  • Private sector employment through appropriate government policy is crucial.
  • Measures are needed to fill the vacant government posts. There has been a massive decline of government sector job growth from 1.3 million per annum from 2005 to 2012 to only 0.4 million per annum from 2012 to 2018.
  • The National Education Policy 2020 is likely to increase the supply of vocationally trained youth due to the expansion of vocational training curricula at the school level, it will have no impact on the labour demand conditions of the industries.
  • Supplementary measures including development of infrastructure and local industrialisation are necessary.
  • The focus will have to be on two kinds of jobs. First, the health and education sectors and the police and the judiciary have too few government staff. These are sectors where the new government can expand government jobs.

Way forward

  • In all governments, State and Central, the share of Groups C and D jobs is an overwhelming 89%, leaving 11% of jobs for Groups A and B. With such few managerial or professional staff, it is impossible to run any government. Post-pandemic, most States will need to increase spending on public health.
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