For a country like ours, that desperately needs 220 million jobs in the next 15 years, creating employment should be our top policy priority. But, it is not so. Instead, we have jobless growth and falling wage indexed labour productivity. Even though we have had two decades of growth, the increase in organised sector employment has not really matched its step with economic development.
In India, most of the growth of employment after the global slowdown has been in the unorganised sector or contract workers, which today constitute nearly 90 per cent of the 60 million manufacturing employees. Experts say, this trend has impacted investments by companies, which strive to improve labour productivity.
In fact, though labour productivity has grown between 3 per cent and 7 per cent, it remains a matter of grave concern that productivity continues to be lower than growth in wages thus hitting the competitiveness of Indian industry. As a result, several companies willingly opt for increasing the level of automation despite higher investment.
While countries are crying themselves hoarse that economic recovery is back, hardly anyone is paying attention to the rising unemployment levels. According to International labour Organisation (IlO), earlier this year, the global unemployment was close to 6 per cent, wherein 197 million people were unemployed. Experts point out that the youth of today are damaged in a way that has not happened for a long time in the global economy.
Keeping the prevalent jobless scenario in mind, experts say that trade unions also are shifting focus from job protection to job creation, which is definitely a welcome change. To take this to next level, we need new companies. If we go by the number of new companies registered between 1990 and 2010, which has stagnated between 20,000 and 40,000, the scene appears to be pretty bleak. We have to give it a serious thought that why despite the economy having grown three and a half times during the same period, companies have not been created.
To help generate jobs, we need to prioritise agriculture and also encourage entrepreneurship. India is ranked at a lowly 132 in World Bank’s Ease of Doing Business. The policymakers need to make it easy to set up and expand new business. We need a concrete policy reform and not some MGNAREGA kind of programme which helps the youth with semi- employment but there has been no serious or fruitful outcome.
The case being made out is we need to rethink our employment generation policies. Though there is strong ground for supporting this priority, many visionary ideas to enhance job generation have been trashed at the altar of politics of vote. Simply distributing gadgets to people will not help generate jobs. At the end of the day, encouraging farm and factories together will lessen the pain of unemployment and lead us to an age of self sufficiency and financial independence for all Indians.