INDIA'S much touted demographic dividend - a country with a younger working population as compared to the ageing societies of the developed markets — may easily turn into a demographic disaster if sufficient employment opportunities are not created.
Demographic disaster
Cautioning on the impending fallout, FICCI president RV Kanoria says: "If we fail to create more jobs, we will face a situation what Aung San Suu Kyi recently described (at the World Economic Forum meeting on East Asia) in the context of Myanmar — the problem of youth employment is like a time bomb. Our demographic dividend may become a demographic disaster."
As per the Indian Staffing Federation (ISF), an apex body of the flexi staffing industry in India, the labour force of India (in the age group of 15-59 years) as of 2011 is estimated at 420 million while the unemployed population is about 14 million.
Rituparna Chakraborty, vice-president of the federation, says most of the sectors require people for entry-level jobs, and are faced with huge talent shortage. Skill deficit is the biggest culprit in job creation, which in turn leads to unemployment.
No skill centres
As per the Labour Ministry statistics, there are no skill development training centres in the country. There are 9,960 government and private Industrial Training Institutes (ITIs) operating in the country under the Craftsmen Training Scheme (CTS). There are also 7,125 vocational training providers (VTPs) who implement the modular employable skills programme under the Skill Development Initiative (SDI) scheme.
The number of ITIs has almost doubled in the last five years. The Ministry of Labour and Employment has formulated a scheme, "Kaushal Vikas Yojana", to set up 1,500 new ITIs and 5,000 skill development centres (SDCs) in un-serviced blocks under the public-private partnership (PPP) mode. The approval process for the scheme is on.
Unemployability factors
The sectors that are likely to see more jobs being created, says Chakraborty, would be retail (more so after FDI), FMCG, healthcare and pharma. On the linkage of employment with the economy, Chakraborty says that the economy is witnessing a slowdown and job creation has taken a hit. It will take some time for the reforms to take full effect and the economy to witness an upturn; till such time the slowdown in job creation is expected to continue.
She says the country is faced with a bigger problem, “unemployability”. To counter unemployment, we need to work on elevating unemployability. According to recent studies, around 60 per cent of the youth in India suffer from some sort of skill deprivation, which stops them from being employed at the entry level. The lack of proper vocational training facilities accentuates this problem. The key skills, apart from the relevant industry skills, will be communication, digital literacy and soft skills.
Estimates of employment and unemployment are obtained through quinquennial labour force surveys conducted by the National Sample Survey Office. The last such survey was conducted during 2009-10. As per the recent surveys, the total estimated number of unemployed persons has declined from 10.84 million in 2004-05 to 9.50 million in 2009-10 and the unemployment rate has come down from 2.3 per cent (2004-2005) to 2 per cent (2009-10).
Government schemes
For employment generation, the government has launched programmes such as Swarana Jayanti Shahari Rozgar Yojana (SJSRY), Prime Minister's Employment Generation Programme (PMEGP), Swarnajayanti Gram Swarozgar Yojana (SGSY) and Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), besides several entrepreneurial development programmes run by the Ministry of Micro, Small and Medium Enterprises.
As per the results of the last survey, the estimated urban unemployment was 4.36 million as compared to rural unemployment of 5.14 million during 2009-10. The unemployment rate among women was 4.3 per cent as against 3.3 per cent for men for the corresponding years.
Government initiatives like the National Manufacturing Policy (NMP), which seeks to create 100 million jobs in the next few years, and FDI in retail are being aimed at employment generation.
The 11th Five Year Plan aimed at creating 58 million additional job opportunities for the skilled and unskilled labour force at an average rate of growth of 2.73 per cent per annum from projected employment of about 402 million at the beginning of the 11th Plan to about 460 million at the end of the Plan. During 2004-05 and 2009-10, about 20 million additional job opportunities were created at an average rate of growth of around 1 per cent per year during 2004-05 to 2009-10 while the GDP grew at 8.6 per cent during the period.
The 12th Plan highlights that there is a potential for an accelerated pace of creation of more durable rural non-farm jobs and livelihood opportunities. Such job opportunities could come from faster expansion in agro-processing, supply chains and the increased demand for technical personnel for inputs into various aspects of farming that is undergoing modernisation and also the maintenance of equipment and other elements of rural infrastructure. The services sector, too, has to continue to be a place for the creation of opportunities, in both rural and urban areas.
Employment increased from 459.10 million in 2004-05 to 465.48 million in 2009-10, creating an additional employment of 6.4 million. During the same period, the labour force increased from 469.94 million to 474.98 million, adding 5.04 million to the labour force.
As per information available with the Directorate-General of Employment and Training, 25.89 million job-seekers, including the educated in the age group of 15-29, all of whom may not necessarily be unemployed, registered with employment exchanges in the country at the end of 2009.
CRISIL findings
Growing labour force
Create more jobs
We are passing through a difficult phase of growth and unemployment. We need to focus on an all-important objective of creating jobs and meaningful employment opportunities for the millions who join the workforce every year in India, with 550 million people below the age of 25 years |
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