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Job creation: Merely a paper trail

Jaswant Kaur Jaswant Kaur
08 Apr 2024

Last week, when most of us were busy closing our accounts, the International Labour Organisation (ILO) produced a report that might have raised many eyebrows. The report, 'India Employment Report 2024: Youth Employment, Education, and Skills,' is the third in a series of reports published by the Institute for Human Development on labour and employment issues in partnership with the ILO.

It examines the humongous challenge of giving remunerative employment to youth in India, laced with concrete data sets, albeit those published and released by none other than the official channels. In other words, unlike any other report published by an international organisation, the data sets cannot be questioned. It is important to point this out at the very beginning, lest people start questioning the authenticity of this report. In fact, it has considered several reports published by the government think-tank Niti Aayog.

However, the data does not show us in a very comfortable position. The report shows that our youth account for almost 80 per cent of the unemployed workforce. Also, the unemployment rate among those with secondary or higher education has nearly doubled from 35.2 per cent in 2000 to 65.7 per cent in 2022. We have grown up listening to this popular saying since childhood, 'kheloge koodoge hoge kharab, paroge likhoge banoge nawab.' It means that education is empowering and is the only sure-shot way to economic freedom. However, the data does not seem to favour this adage.

In fact, the report only proves that the more educated the youth in India, the higher the possibility of unemployment. There are several reasons for this trend. In fact, Modiji has been vocal about it ever since he came to power in 2014. Not just that, the government came up with the Skill India Mission, which led to the establishment of a vast infrastructure in terms of the national skill development corporation, sector skill councils, national skill quality framework, partnerships with private agencies as training partners, and so forth under the government's flagship scheme – Pradhan Mantri Kaushal Vikas Yojana implemented by the Ministry of Skill Development and Entrepreneurship (MSDE) with an ambitious target of up-skilling / re-skilling 400 million people by 2022.

The government spent tens of billions of rupees to bridge this gap. Usually, a program implemented on such a considerable scale should have tackled the problem effectively. The government claims to have trained more than a crore youth through short-term training (STT) programs, courses for recognition of previous learning (RPL), and special projects. However, if one looks at the placement rate, it is abysmally low in both STT and special projects. In fact, only 19,81,952 have been placed till March 31, 2021. This is barely 20 per cent! Besides, most of the funds have been utilised for up-skilling programmes. How this has resulted in improving their annual income is not known.

In fact, the latest data set on data.gov.in does not give any information on the number of placements that have been done. The data set is claimed to have been updated till April 21, 2022.

Coming back to the ILO report, the study shows that the Labor Force Participation Rate (LFPR), Worker Population Ratio (WPR), and Unemployment Rate (UR) deteriorated between 2000 and 2018 but improved after 2019. It adds a caveat that this improvement coincides with the periods of economic distress, both pre and post-COVID-19, except for two peak COVID-19 quarters. It "needs to be interpreted cautiously as jobs generated in the slowdown period raise questions about the drivers of these changes," the authors warn as they released the report last week. It only means that people were so distressed that they were willing to work on meagre wages to tide off the financial crisis. This is evident from the fact that the monthly average earning of a casual worker was only Rs. 7,997, while that of a self-employed person was Rs. 10,201 in 2022. Of course, those having regular jobs were in a much better position with an average monthly salary of Rs. 15,177.

If one looks at the way women were treated in these three segments, it is shocking to see how women are being discriminated against with a 38 per cent lower wage in casual work, 58 per cent lower in case women are self-employed, and 35 per cent in the case of regular jobs! The government that has been speaking about women's empowerment needs to work diligently to provide a women-friendly work environment.

While the farm sector saw a dip in employment opportunities, the non-farm sector's growth was insufficient to absorb workers from the agricultural industry. "This is notwithstanding the fact that non-farm employment grew at a higher rate than farm employment over the different periods prior to 2018", as per the report. It is evident that labour from agriculture was mainly absorbed by the construction and services sectors, forcing almost 90 per cent of the workers to work in the informal sectors. The share of regular work, which steadily increased after 2000, declined after 2018.

The report shows a huge range of livelihood insecurities, with a tiny percentage of the workers being covered under social protection schemes, precisely in the non-agricultural, organised sector. "Worse, there has been a rise in short-term contracts, with only a small percentage of regular workers covered by long-term contracts," the report said.

While we have a large young workforce, which could have acted as a demographic dividend, spelling the country's growth, something countries like Japan did, the report shows that we have mostly failed on this front. Our youth do not appear to have the skills to deliver, as evident from the fact that 75 per cent of them were unable to send emails with attachments, 60 per cent cannot perform the most basic functions like copy and paste files on a computer, and 90 per cent cannot put a mathematical formula into a spreadsheet! This is the kind of young workforce we have!

Besides, we have a high labour underemployment rate, which implies that those who are employed are not working up to their full capacity. The underemployment rate in India was 8.1 per cent in 2012 and 9 per cent in 2019, which fell to 7.5 per cent in 2022. The report cautions that this reduction should not be taken at face value as it could only mean a shortage of work opportunities, especially for women.

Another factor that the report has established is the craze for government jobs. Although the private sector is one of the biggest employers, people still want a government job. Data shows that only two out of 10 jobs are government jobs, yet people work hard for years to crack the exam for getting a Sarkari job. Even if they don't have any source of income, they would rather wait than end up working in a low-paying private job! Small wonder that only half of India's young working-age population is actually working or seeking work.

Our honourable Prime Minister has set an ambitious target of doubling the economy and exports in the coming decade, intending to make the economy the third largest in the world if he wins a third term in a row. In fact, plans for achieving this target are underway. They shall be finalised around May, with the economy's expansion to $6.69 trillion in nominal terms by 2030, from around $3.51 trillion currently. With the current state of employment, unemployability, and low labour workforce participation rate, how this will be achieved is a big question that has no answer. This is like turning a blind eye to the ground realities and aiming for the sky.

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