The future holds good promise for India provided we can seize the “demographic dividend”, as nearly half the additions to the Indian labour force over the period 2011-30 will be in the age group of 30-49 years. Also, productive jobs are vital for growth and a good job is also the best form of inclusion. Since more than half our population depends on agriculture but the experience of other countries suggests that the number of people dependent on agriculture will have to shrink if per capita incomes in agriculture are to go up substantially. This was mentioned in the Economic Survey for the year 2012-13 which was tabled the Union Finance Minister Shri P. Chidambaram in the Lok Sabha today.

While industry is creating jobs, too many such jobs are low-productivity non-contractual jobs in the unorganized sector, offering low incomes, little protection, and no benefits. Service jobs are relatively high productivity, but employment growth in services has been slow in recent years. India’s challenge is to create the conditions for faster growth of productive jobs outside of agriculture, especially in organized manufacturing and in services, even while improving productivity in agriculture. The benefit of rising to the challenge is decades of strong inclusive growth.

The Survey shows that since 1991, the beginning of economic reforms in India we are growing at a similar rate more or less as Indonesia but China and Korea grew faster in terms of per capita income as well as our share in world trade.

The Survey has expressed concern over the inability of service sector for not creating jobs. It says, in addition to labor regulations the lack of properly educated and skilled work force is also a factor. As suitable higher education is important for high-end services such as information technology, software development and finance. The Mid-level services such as retail trade, hotels, and restaurant services also require adequate skilling of the labour force. In this connection, schemes such as the formal apprenticeship programme of the government which places employers at the heart of education, can play a powerful role in imparting job-relevant skills and also re-training and upgrading the labour force. In its current form the Act and Rules governing the apprenticeship are outdated and rigid from both the perspective of employers and employees. Here changes are needed. Also, the challenge is to address both quality and quantity issues in skill development and train so as to correct the mismatch between employers who do not get people with requisite skills and millions of job seekers who do not get employment . To this end the National Skill Development Mission aims to impart employment-oriented vocational training to 8 crore people over the next five years by working with State governments/State Skill Missions and incorporating the private sector through PPPs and for profit vocational training and NGOs. Basic education is also an important input for enhancing human capital.

We stand at a cross roads where we need to develop a clear strategies for continued growth. It also suggests that for creating better employment facilities in industrial sector. We need to formulate a common policy on business development and regulation; help business facilitation; simplify registrations for starting up; ease burden of compliance as the firm grows; allow for easy exits; transform employment exchanges to enable effective job matching; improve value/benefits from statutory pre-emptions and reduce attractiveness of staying small.

In a nut-shell India has to focus on an agenda to create productive jobs outside of agriculture which will help up reap the demographic dividend and also improve livelihood in agriculture. We need to examine carefully whether regulations contain business excessively and, if so, strip away the excess regulation while ensuring adequate protection and minimum safety nets for workers. Building infrastructure and expanding access to finance will also help. While the government is clearly in this process, some further steps need greater debate and action.

DSM/UM/ST/DM

(Release ID :92569)

Employment regulation reform to enable creation of productive non agricultural jobs and boost skill aligned workforce participation. Policy emphasis is on creating higher productivity jobs outside agriculture through regulatory and institutional reforms and large scale skills development. Key measures include reforming the outdated apprenticeship Act and Rules to engage employers in job relevant training, scaling vocational training via the National Skill Development Mission with public private and nonprofit partners, simplifying business registration and compliance, easing firm exit, improving employment exchanges for job matching, and balancing reduction of excessive regulation with preservation of minimum worker protections.