Six step to job creation(GS 3-Economy,Employment)
Paradox- India is indeed the fastest growing large economy in the world.
yet with investment low, credit offtake low, capacity utilisation in industry low, agricultural growth low, plant load factor low, it is hardly surprising that job growth is low as well.
India’s highly segmented labour market, one can still discern at least three demographic groups that are in urgent need of jobs:
- a growing number of better educated youth;
- uneducated agricultural workers who wish to leave agricultural distress behind;
-and young women, who too are better educated than ever before.
Major Cause of low job growth rate-1. it is the pattern of growth that is the problem.
2. Among many dimensions of this problem is the fact that in the quarter century since economic reforms began, it is not manufacturing that has been the leading sector driving growth.
3.Manufacturing should drive productivity in the whole economy. Services cannot, as services by definition ‘service’ the distribution of produced goods.
What can be done to Revive growth-
1.Industrial,Trade Policy- An industrial and trade policy is needed.
- For 20 years after economic reforms began in 1991 there was no National Manufacturing Policy, and the Policy, when it came in 2011, was not even implemented.
3. The Department of Industrial Policy and Promotion (DIPP) is finally preparing an industrial policy.
4. it is essential that trade policy is consistent with such an industrial policy. Otherwise the two may work at cross purposes and undermine each other’s objectives.
5. Excessive imports have been decimating Indian manufacturing.
2.Special packages are needed for labour-intensive industries to create jobs. There are a number of labour intensive manufacturing sectors in India such as food processing, leather and footwear, wood manufacturers and furniture, textiles and apparel and garments.
3.Cluster development- There should be cluster development to support job creation in micro, small and medium enterprises (MSMEs).
-Most of the unorganised sector employment is in MSMEs, which tend to be concentrated in specific geographic locations.
-There are 1,350 modern industry clusters in India and an additional 4,000 traditional product manufacturing clusters, like handloom, handicraft and other traditional single product group clusters.
-There is a cluster development programme of the Ministry of MSMEs, which is poorly funded and could be better designed as well.
4. Align urban development with manufacturing clusters to create jobs.
-The Ministry of Urban Development (MoUD) has a programme called AMRUT (Atal Mission for Rejuvenation and Urban Transformation) aimed at improving infrastructure for small towns.
- An engagement between the Urban Development and MSME Ministries is necessary to ensure that when infrastructure development is taking place in any town,it must engage cluster of activity.
5. Focus of women- Girls are losing out in jobs, or those with increasing education can’t find them, despite having gotten higher levels of education in the last 10 years.
- The problem with skilling programmes has been low placement after skilling is complete.
-The availability of jobs close to where the skilling is conducted will also enhance the demand for skilling.
- Skilling close to clusters (rather than standalone vocational training providers), which is where the jobs are, is likely to be more successful.
6. Public investments in health, education, police and judiciary can create many government jobs.
Health- Public investment in the health sector has remained even in the last three years at 1.15% of GDP, despite the creation of the national health policy at the beginning of 2017.
The policy indicates that expenditure on health will rise to 2.5% of GDP only by 2025.
In the absence of greater public expenditure, the private sector in health keeps expanding, which only raises the household costs on health without necessarily improving health outcomes.
- More government expenditure in health means more jobs in government and better health outcomes.
Revitalise schools- Government schools also have such poor quality that parents are voting with their feet by spending money on private schools, whether or not the poor parents can afford it.
The number of teachers required, at secondary and higher secondary levels, is very high, particularly in science and mathematics.
Police and judiciary- While the number of paramilitary personnel continues to grow, State governments are not filling even sanctioned posts in the policy and in the judiciary (at all levels there are vacancies).
More police and a larger judiciary can both reduce crime as well as speed up the process of justice for the ordinary citizen.