Govt to form Inter-Ministerial Core Group on Employment

What’s in today’s article?

• Why in the News?
• Employment in India
• Challenges w.r.t. Employment in India
• Key Government Initiatives
• Suggestions / Way Ahead
• Latest Employment Data for India
• News Summary

Why in the News?

• Union labour minister Mansukh Lal Mandaviya chaired an inter-ministerial roundtable meeting on capturing and creating a central database on employment.

Employment in India

• Employment in India is a multifaceted issue, influenced by the country's diverse economy, demographic trends, and evolving industrial landscape.
• As one of the world's fastest-growing economies, India faces both opportunities and challenges in creating sufficient and quality employment for its vast population.
• Current Employment Trends:
  • India's labor market is characterized by a large informal sector, significant rural employment, and a burgeoning services industry. Key trends include:
  • Informal Sector Dominance: Over 80% of India's workforce is employed in the informal sector, which includes agriculture, construction, and small-scale industries. This sector often lacks job security, benefits, and consistent income.
  • Rural Employment: A substantial portion of India's population still relies on agriculture for their livelihood.
• As per Government data, about 65 percent of the people in India are engaged in agriculture and allied activities directly.
  • Growth of Services Industry: The services sector, including IT, finance, and retail, has seen significant growth, contributing to job creation in urban areas and improving India's global economic standing.

Challenges w.r.t. Employment in India

• India's employment scenario faces several challenges that need to be addressed to ensure sustainable growth:
• Unemployment and Underemployment: Despite economic growth, unemployment remains a concern, particularly among the youth and educated populations. Underemployment, where individuals work in jobs that do not fully utilize their skills, is also prevalent.
• Skill Gap: There is a notable gap between the skills possessed by the workforce and those demanded by employers. This mismatch hinders productivity and limits economic potential.
• Job Quality: Many jobs in India, especially in the informal sector, are characterized by poor working conditions, low wages, and lack of social security, impacting the overall quality of life.

Key Government Initiatives

• Skill India Mission: It was launched in 2015 with an aim to train over 400 million people in different skills by 2022, enhancing employability and bridging the skill gap.
• Pradhan Mantri Mudra Yojana: Launched in 2015 to provide loans up to Rs. 10 lakh to the non-corporate, non-farm small/micro-enterprises.
• Make in India: Encourages domestic and international companies to manufacture in India, creating jobs in manufacturing and related sectors.
• Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA): Provides legal guarantee for at least 100 days of wage employment in rural areas, promoting livelihood security.

Suggestions / Way Ahead

• Economic Diversification: Expanding beyond traditional sectors to include emerging industries like renewable energy, biotechnology, and digital services can drive job creation.
• Educational Reforms: Aligning educational curricula with market demands and promoting vocational training can prepare the workforce for future challenges.
• Technological Integration: Embracing technology in various sectors can enhance productivity and create new job opportunities, particularly in tech-driven fields.

Latest Employment Data for India

• According to PLFS and RBI's KLEMS data, India has generated more than 8 crore (80 million) employment opportunities from 2017-18 to 2021-22.
• This translates to an average of over 2 crore (20 million) employment per year, despite of the fact that the world economy was hit by COVID-19 pandemic during 2020-21.

News Summary

• Union Labour Minister Mansukh Mandaviya chaired an inter-ministerial meeting focused on creating a central employment database to integrate various employment data sources for a comprehensive view of employment generation in India.
• The meeting involved 19 union ministries and industry associations aiming to establish systematic data recording on employment resulting from government schemes, programs, and projects.
• Mandaviya emphasized the need for a core group comprising different ministries, departments, and industry to build synergies and integrate efforts currently existing in silos.
• He also highlighted the industry's demand for a skilled workforce, urging industry bodies to offer internships to young people to prepare them with adequate skills and professional qualifications.

This initiative aligns with recent Union Budget proposals related to employment, internships, and skilling.

Q1. What is Cyclical Unemployment?

Cyclical unemployment refers to the unemployment which is caused by the changes in business cycles, that is economic upturn or downturn. Cyclical unemployment is a component of overall unemployment and is affected by the economic recession or expansion.

Q2. What is Structural Unemployment?

Structural unemployment is long-lasting unemployment that comes about due to shifts in an economy. This type of unemployment happens because though jobs are available, there's a mismatch between what companies need and what available workers offer.

Source: Govt to form inter-ministerial core group on employment, integration of jobs data | PIB