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National Employment Policy could go a long way in solving workforce challenges, reveals study

With India facing a severe crisis of employment and livelihoods, economic growth has failed to generate secure, regular, and decent incomes for the vast majority. The Azim Premji University has set up the Centre for Sustainable Employment (CSE) to foster fresh and creative thinking on this issue. The varsity released its key findings of the CSE’s State of Working India (SWI) 2018 report:

1) Growth creates fewer jobs than it used to: A 10 percent increase in GDP now results in less than 1 percent increase in employment. As a result, the rate of unemployment among the youth and higher educated has reached 16 percent.

2) Wages are rising but they continue to be well below the Seventh Central Pay Commission: Adjusted for inflation, wage rates have grown in most sectors at 3 percent per annum or more. But 82 percent of male and 92 percent of female workers earn less than ₹10,000 a month.

3) There is a slowdown in the replacement of workers by machines but work is becoming more precarious in the organised manufacturing sector: Number of jobs supported by one crore rupees of fixed capital in organised manufacturing has leveled at around 10. But contract workers are nearly 30 percent of all workers in organised manufacturing

India workers remittance. Representational image. Reuters

Representational image. Reuters

4) Productivity has increasingly diverged from wages: Labour productivity in organised manufacturing

increased by six times over the past three decades but wages increased by only 1.5 times

5) ‘Surplus Labour’ industries still dominate as ‘new’ service economy grows slowly. ‘Surplus labour’ based industries account for more than 50 percent of service sector employment.

6) Gender disparities are still high but are reducing in some cases: Women are 16 percent of all service sector workers but 60 percent of domestic workers. And overall women earn 65 percent of men’s earnings.

7) Women’s participation in the paid workforce is low but some states perform much better than other. While only 20 women are in paid employment for every 100 men in UP, this number is 50 in Tamil Nadu and 70 in the north-east. And government programmes are crucial.

8) Caste disparities remain large but public policy is effective in reducing them. Scheduled castes are 18.5 percent of all workers but 46 percent of leather workers. The caste earnings gap is larger than the gender earnings gap.

9) Crafts remain big employers and are central to the rural non-farm economy. With over 500 officially listed arts and crafts, the sector represents immense cultural value, ecological positives, and millions of jobs.

10) Towards a ‘National Employment Policy: A focused National Employment Policy is needed and that it should take the following into account:

i) There is a growing popularity of employment guarantee across the world, including in OECD countries. There is a growing popularity of employment guarantee across the world, including in OECD countries. With MGNREGA, India has been a leader in this trend, and it should build on its experience

ii) The last few years have seen a renewed interest in industrial policy and the emergence of policies such as wage subsidies and incentives for skilling workers.

iii) There is a need to look closely at successful state-level employment policies and learn from the diversity of experiences across states.

iv) There is adequate availability of fiscal space at the Central and State levels.

v) Public investment is urgently needed in agriculture to raise the income floor in the economy.

vi) There are many advantages to a Universal Basic Services (UBS) programme that invests in education, health, housing, and public transport and safety to create jobs, human capital, and public goods.

vii) Job creation can be fruitfully tied to investments in green energy and climate adaptation efforts.

viii) The falling female labour force participation may be due to lack of available work, not just social restrictions on women, or increasing enrollment in educational institutions.

ix) Government programmes are very powerful in reducing social disparities.

x) There is an urgent need to address data lacunae especially with respect to unpaid work and establishment-level data.


Updated Date: Sep 26, 2018 15:39 PM

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