India adds over 10 million new employees to the workforce every year. This is equivalent to roughly the entire population of the Czech Republic or Portugal.
The government of India promised 20 million jobs annually three years back, while the reality is that 1 to 2 percent of the government’s target has been achieved.
The pace of job creation fell to a six-year low in 2015 with 1.35 lakh new jobs being created compared with 4.21 lakh new jobs in 2014 and 4.19 lakh in 2013, according to a quarterly survey of industries conducted by Labor Bureau, under the Ministry of Labor and Employment.
Another survey-Fifth Annual Employment-Unemployment Survey of households conducted by Labor Bureau showed unemployment rate rising to a five-year high of 5% in 2015-16 compared with 4.9% in 2013-14 and 4.7% in 2012-13.
At present, in India, around 92% of the workers are engaged in informal employment, those who are not covered by any social security law.
The Organisation for Economic Co-operation and Development (OECD )report said that over 30 percent Indian youth aged 15-29 are not in employment. This is more than double the OECD average of 14.6 percent and three times that of China (11.2 percent).
The present pace of job creation in India is nowhere near the need of the country, considering the steady growth in population and particularly with the large segment of growing population constituting the youth.
A matter of grave concern
It has been said by the Government of India, several state governments and also a few of the international study groups that Indian economy is growing at an impressive rate. Some overseas study groups have also said that the growth of Indian economy is even faster than that of China and India is now one of the fast developing countries in the world today.
The government of India expects that the Indian digital economy will be a $1 trillion economy in 5 to 7 years.
The government says that foreign direct investment (FDI ) inflows and private investments in telecom, infrastructure, energy, and power have been indicative of a change in business sentiments.
In support of its stand, the following data have been provided by Government of India.
* Foreign direct investment climbed to an all-time high from $36 billion in 2013-14 to $62 billion in 2016-17.
* India’s foreign exchange reserves soared from $341 billion in 2014-15 to $376 billion in 2016-17.
* India remains one of the fastest-expanding economies from GDP growth of 6.5% in 2013-14 to GDP growth of 7% in 2016-17.
However, the ground reality is that such impressive growth is not resulting in the .growth of happiness index among a cross section of countrymen, as the gap between the haves and have-nots are increasing, as large number of youth remain unemployed or underemployed leading to frustration and bitter feelings.
As a result of population growth and lack of adequate job addition and the following increasing level of unemployment in the country, joblessness amongst the youth may lead to restive conditions in the country in the coming years.
This is a matter of grave concern that has to be tackled by Modi government with a great sense of urgency.
Government’s claim on job creation
A recent tweet from BJP claims that, as on May 2017, the number of small entrepreneurs who received loan was 7.75 crore amount of loan sanctioned was Rs.3.32 lakh crore and total amount disbursed was Rs.3.21 lakh crore.
The government says that larger number of jobs have been created in electronic manufacturing, digital economy and the Start Up India initiatives. The Mudra scheme has created many small entrepreneurs who are generating jobs. Self-employment generation has been a focus of the government.
Obviously, such progress in the employment generation is inadequate.
During the last three years, the following three sectors have outpaced GDP growth
Financial services, Real estate, and professional services;
Public administration, defense and community services;
Trade hotels and restaurants.
However, construction and manufacturing activity, which are employment oriented, have been lagging overall GDP growth.
Why is overall growth not leading to job growth?
India has a large number of educated unemployed. On the other, industry is desperately short of skilled professionals. One of the biggest challenges faced by industry across the country today is in finding candidates for employment with the right skills sets.
If one would look at the overall scenario, there is unlikely to be a dearth of jobs, considering the growth in various sphere of activities and self-employment opportunities but the shortage is of the required skills for a particular job.
With the overemphasis on academic performance and widespread interest amongst youth to get degree qualification which is considered as a matter of social prestige, colleges and universities in India are producing qualified but hardly employable graduates. The result is that the employability gap is getting wider by the day.
The growing disconnect between higher education and industry requirement in India is causing severe constraints in utilizing the opportunities created by the overall growth, to boost employment generation.
The country produces lakhs of engineers and diploma holders every year. Most of them are not trained to carry out skilled jobs but are ready only for file pushing jobs, sitting in offices to conduct desk work related to planning, purchase, sales, etc. How many engineers and diploma holders the country needs to do this kind of office oriented work?
Skill development needs to be an active component of Indian educational curriculum. A good mix of classroom teaching and practical training is what is necessary. This is yet to be done, and plans and efforts towards achieving this objective are dismal.
Thoughtlessness in planning in the past by All India Council of Technical Education in according permission to open of so many engineering colleges all over India without carefully considering the need of the country has caused huge problems.
In the same way, there is no need for so many science and arts graduates. Most of them carry out totally unrelated jobs after completing their education, as they have no particular skill in any field of study. They have neither educational plan nor career plan while joining the educational courses and completing it.
The damage has been done due to poor planning of the government for the last several years, by not creating an adequate number of institutions for providing skill oriented education and training in appropriate fields.
As a result, the country is suffering today with the lakhs of youth remaining jobless and not knowing what to do.
Efforts of Government of India
The National Skill Development Corporation was set up with the objective of increasing the skill training capacity in the country. It was formed in 2008 to encourage and synchronize private sector initiative in skill development. It was planned that the skills of a vast number of young people from the unorganized sector, who lack formal certification, could be utilized under umbrella initiatives recognized by the government.
Narendra Modi government’s ambitious Skill India campaign targets training 40 crore people in different skills by 2022. It includes initiatives like the Pradhan Mantri Kaushal Vikas Yojana and Deen Dayal Upadhyaya Grameen Kaushalya Yojana, the flagship schemes for incentivising skill training.
But lack of widespread awareness about such training programmes, particularly in the rural areas where unemployment level is high, the absence of adaptability with the changing market needs and the lack of vertical mobility are key challenges facing the skill development landscape in India.
Start up India, Make in India schemes yet to make impact
Government of India, with much fanfare and good intentions, launched Start Up India and Make in India projects, expecting that it would enthuse the countrymen, particularly the youth to set up activities in manufacturing and service oriented sector in multiple fields all over India, that would generate chain of activities, leading to significant level of employment generation.
However, the schemes have not so far made progress to the degree of expectation. Many of the projects under Start Up India program launched have not been in the manufacturing sector or research pursuits but more related to low skill oriented services and trading sector.
A study titled “Entrepreneurial India: How start-ups redefine India’s economic growth” conducted by Institute for Business Value Study (IBM)’ was commissioned in the second half of 2016. It had about 1,300 Indian respondents, around 600 of whom are entrepreneurs and another 100 venture capital investors, apart from leaders in enterprises, government and academia.
The IBM report has pointed out misreporting of financial and other data, misrepresentation of financial plans or achievements, and ignorance of regulatory requirements amongst Start Up India entrepreneurs.
Almost two-thirds of 100 venture capital (VC) investors (64% polled) covered in the IBM study claim that the poor corporate governance due to entrepreneurial inexperience is the leading cause for the Start Up India scheme not taking off well.
While Government of India has to launch a careful investigation about the progress of the schemes. Obviously, lack of skill amongst the people is the cause for such well-intentioned plans not taking off in the manner desired.
What way forward now?
The government of India and all state governments have to reassess the level of academic oriented engineers and graduates needed by the country, keeping the job potentials in view. There is need to reorient the education and training program at various levels in tune with the skill required, emerging trend and job profiles, keeping the ground realities in view. There is no point in producing a massive number of generalist graduates, who have no particular specialization or skill to take up jobs. The emphasis has to be on promoting employability amongst the youth.
There is a myth in the country that anyone can be considered as educated only if the person would be a graduate or diploma holder. Youth have to be clearly told that most segments of the army of graduates in India are not doing anything good to themselves or the country. They are not part of the productive force.
It is high time that the government should stop giving permission for new general courses and engineering colleges that do not directly skill development oriented and drastically reduce the number of the existing ones based on the assessment of need. Several existing colleges can be converted to specialized educational institutions, imparting knowledge and skill in diversified areas that would make the students employable
Promotion of skill for self-employment
The youth must be motivated to take responsibility to think and try to stay current. Getting a job is not necessarily the answer, as jobs can not be provided to everyone in a highly populated country like India in the organised sector unless self-employment activities surge in a big way. Youth have to move away from the old job mindset.
The educational and training program should be oriented to provide internships and provide students hands-on work opportunity and help them learn to apply their theoretical knowledge to real life situations to enable them to become self-employed persons and turn themselves to be employers rather than employees.