Unemployment in India

Why in news?

Surveys by the Centre for Monitoring the Indian Economy (CMIE) have highlighted that employment in India is not expanding in par with the growth of the economy.

What are the concerns?

• Unutilised employment potential in the phase of demographic transition will only lead to a demographic catastrophe.
• Despite consistent growth in GDP, corresponding job creation has not taken place.
• Jobless growth is a dangerous trend as it furthers social inequality.

What are the possible causes?

• The root cause of the problem is the shortage of skills.
• Labour-intensive sectors are suffering from slowdown in private investment particularly after demonetisation.
• Unfavourable incentives that do not allow companies to grow and take advantage of abundant cheap labour.
• One of the other probable reasons for jobless growth is automation in most economic activities which has reduced labour requirements.

What are the past initiatives by the government?

• National Career Service portal was launched serving as a common platform connecting job-seekers, employers, skill providers, placement organisations and counsellors.
• Pradhan Mantri Kaushal Vikas Yojana (PMKVY) a skill development scheme to help young people learn industry-relevant skills.
• MGNREGA has contributed to lowering unemployment in rural areas.
• Start Up India, Stand Up India, National Skill Development Mission.

What should be done?

• Structural reforms to labour, land and capital markets for sustainable job creation so as to boost the Indian manufacturing sector.
• The government should make its teaching and academic curricula more employable-driven to address shortage of skills.
• Reforming archaic labour laws which currently proliferate only contractual jobs instead of permanent employment.
• Infrastructure investment can be utilised as an engine of job-creation.
• India also needs to bargain hard with the US for easier work visa norms so that pressure of some unemployment can be eased out to an extent.

Source: Business Standard