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Topic in News

#modi_rojgar_do Rising unemployment problem in India

Why in the news?

Recently a trend ‘#Modi_Rozgar_do’ erupted on various social media platforms such as Twitter and Facebook as a response to declining employment opportunities in the public sector.

Employment crisis in India’s public sector:

  • In India, public employment is not only inadequate but has been falling in relation to population.
  • Total employment in India dropped by 9 million between 2011-12 and 2017-18, a first in the country’s history.
  • Central government employment is estimated to constitute only around 14% of total public employment in India.
  • As of February 2020, more than 6.8 lakh posts were vacant in the Central government.
  • Similarly, more than 40 lakh vacant posts are lying with different state governments.
  • The structure of public employment is also unbalanced. Among the Central public sector enterprises, employment in Central Public Sector Enterprises fell by as much as 2.2 lakhs between 2011-2012 and 2017-2018.
  • The biggest declines in such employment were not at the managerial and supervisory levels but among “non-executive” workers of all kinds.
  • Among such “non-executive” workers, the proportion that is under contract or casual/daily work has increased significantly. By 2017-2018, such insecure workers accounted for more than one-third of the actual workforce.

Issues in the existing overall employment pattern:

  • Jobs in Services sector: The service sector is the only industry that is “driving the growth jobs in the non-farm sectors, while employment growth in construction has decelerated along with a fall in manufacturing employment during 2011-12 and 2017-18
  • The continued decline of jobs in the agriculture sector: The agriculture sector kept the momentum of continued decline in employment level at the rate of 4.5 million per annum during 2011-12 and 2017-18.
  • Increased informalisation of public sector jobs: Even though there has been a large number of vacant posts within the central government, the government has been hiring a fewer number of personnel. Instead, it is hiring personnel on a contract basis with no security of tenure, no social security, etc.
  • Large numbers of unrecognized workers in the public sector: Scheme workers, for example, are not recognized as public employees by the government, and are paid “honoraria” rather than wages, which, in fact, most fall well below the minimum wages.
  • Increases gender gaps: The average wage received by women regular public workers in rural areas is only around half of that received by men – a shockingly large wage gap.
  • Dropping productivity due to increasing informalisation in the public sector: Less secure contracts and deteriorating conditions of work in the public sector are bad for workers and also have implications for long-term productivity gains.
  • Affected public services: Due to non-hiring, essential public services such as public health, sanitation, education, etc. are being hit negatively taking a toll on the productivity of the overall economy.

Reasons for shrinking jobs:

  • Increased number of educated youth: Due to increased access to education, more youth are entering the job market. On the contrary, there are very few jobs being created in the formal sectors.
  • Decline in economic growth: The growth of the economy has considerably slowed down since 2014 which has forced the government to hire less due to an already ballooned fiscal deficit.
  • More inclination towards disinterment: The incumbent government is more inclined towards disinvestment which has also slowed down the hiring process in the public sector.
  • Attitude against globalization: Across the western countries, there has been resentment against globalization and employment opportunities given to foreigners from India and other Asian countries. They have also reported on restrictive Visa policies.
  • Lack of skilled workforce: A large section of the Indian workforce is still poorly skilled which has reduced their employability. Companies due to fear of escalation of cost have been fearing to hire unskilled workforce.

Way ahead:

  • National Employment Policy: Government should bring in a  national employment policy that should promote decent work, minimum wage, and social security. It should also ensure a steady, swift, and transparent hiring process for the public sector.
  • Start-Up India: There is an immediate need to scale up the ‘Start-Up India’ in order to promote entrepreneurship in India. The start-ups can create a large number of jobs in the industry as well as the services sector.
  • Promote skill up-gradation: The Indian workforce needs to be equipped with the latest skills set so that it can work with the new upcoming technology-based sectors.
  • Dedicated schemes for self-employment in the urban sector: The government should also promote self-employment schemes in urban sectors in different areas such as internet-based, services sector, etc.
  • Ensure efficient public service delivery: By ensuring efficient public service delivery, the government can address employment opportunities while increasing the productivity of the economy.