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Generating 90 million jobs in non-farm sector 'would require’ 8-8.5% GDP growth

By Our Representative
Speaking at a webinar, organized by the Center for Work and Welfare at Impact and Policy Research Institute (IMPRI), Working People’s Charter and Counterview on the subject Employment Scenario, Policy and AtmaNirbhar packages Amidst Pandemic: Impact, Challenges and the Way Forward, Dr Vinoj Abraham, professor at the Centre for Development Studies, has regretted that the challenge of  unemployment began peaking even prior to the Covid-19 pandemic, starting with 2017-18, and now things have begun to worsen.
The unemployment rate was 6% and in 2017-19, and thereafter it started rising, Dr Abarham said. Covid-19 has had an extreme effect on the economy. The information available, especially from the Centre for Monitoring Indian Economy (CMIE), states that the unemployment rate shot up in April-May 2020 and became better June onwards.
The issue of unemployment became clearer with the increased media attention on the helpless migrants who were struggling to get jobs and get back to their hometowns. The Government of India tried to offer support through three stimulus packages aimed at different groups of classes. One package focuses on the poorer people, but the other two were targeted at the larger and smaller businesses.
Dr RB Bhagat, head, department of migration and urban studies at the International Institute for Population Sciences, touched upon the various aspects of how the pandemic has affected our lives, including employment, the demographic dividend and the silence regarding the state of the migrant workers, as if they are not part of the workforce.
Dr Radhika Pandey, fellow, National Institute of Public Finance and Policy (NIFPP), who has written extensively on the issues of employment in India, particularly amidst the pandemic, in her presentation focussed on the current state of employment in the country and the approach of the government’s Atmanirbhar package in addressing the challenge. Underlying themes of the government’s Atmanirbhar package include creating an ecosystem to facilitate demands and to avoid cash transfers, she said.
With the Atmanirbhar Package 3.0, the Government is giving companies incentives to employ workers. The idea is to integrate the migrant workforce with the workforce in the formal sector, Dr Pandey said.
While the government raised the allocation for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) to address the problem of rising unemployment due to the influx of migrant workers, the proposal to implement an urban replica of MGNREGA is on hold for now. This seems to be a well thought out decision considering the challenges of the urban infrastructure and the resource constraints faced by the urban local bodies. 
Economic policy certainty, contract enforcement and dispute redressal are some key factors that need to be addressed. Garib Kalyan Yojana requires an identification strategy
Dr Pandey elaborated on a recent report by McKinsey that suggests that to address the challenge of unemployment in India, we need to generate at least 90 million jobs in the non- agricultural sector. To achieve this ambitious goal, it is imperative to boost the GDP to 8-8.5%, especially in manufacturing, construction and labour intensive sectors. The need for non-farm jobs was especially stressed upon since the agricultural sector has a saturation point and there is a lack of demand elasticity.
The policies implemented by the government to address unemployment need to acknowledge that the informal sector is languishing and salaried jobs remain stagnant, despite an increase in entrepreneurs.
Dr Pandey also provided insights on the National Employment Policy. She emphasised on its need to have a more holistic approach to address the issue of unemployment. It is important to look at the composition of employment for more gainful employment in the formal sector.
There is a low and declining female participation rate, low productivity and lack of quality jobs and threat of automation. There is also a critical need for a shift from agriculture to manufacturing. Moreover, the enterprise structure is missing middle man -- it has a sizable proportion of small enterprises and otherwise large, but nothing in the middle.
There are some accompanying factors to address with the National Employment Policy to address the rising unemployment rates in our country. For one, economic policy certainty is needed. Uncertainty means private stakeholders will not cooperate with the government and that’s imperative for job creation. Secondly, public-private partnership is necessary to avoid unnecessary cost escalation for the private sector which can lead to projects being frozen.
Essentially, economic policy certainty, contract enforcement and dispute redressal are some key factors that need to be addressed. It is also important to recognize that programmes like the Garib Kalyan Yojana require identification strategy first. Such strategy is imperative for the informal sector also by keeping in mind the people you want to cover in the transformation programme.
The other speakers that contributed to the discussion included Dr Vinoj Abraham who moderated the session, Dr. RB Bhagat who chaired the session, Prof Utpal K De, professor of economics at the North-Eastern Hill University (NEHU), and Dr Amrita Pillai, research fellow at the National Institute of Public Policy.
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Acknowledgement: Sajili Oberoi, research intern at IMPRI, has completed bachelors in political science from Ramjas College, Delhi University

Comments

Anonymous said…
i think many of the last few years have seen negligible job growth despite reasonable growth numbers. I believe the 8.5 % number will meet the same fate. there will be growth but jobless growth. the changing world is not being taken into account is these projections

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