To address unemployment, the Government must adopt a thee-pronged approach comprising skill-based education, exportable talent and a focus on manufacturing and agriculture sectors
India is standing at a crucial juncture where its evolution into a global power and a developed economy largely depends on how efficiently it tackles the menace of rising unemployment. As per the National Sample Survey Office report, 2017-18, unemployment rate is estimated to be at a 45-year high, reaching 7.8 per cent in urban areas and 5.3 per cent in rural areas.
In one of its recent reports titled, ‘South Asia Economic Focus, Spring 2018: Jobless Growth?’, the World Bank estimates that every month, the working age population increases by 1.3 million people and India must create 8.1 million jobs a year to maintain its employment rate, which has been declining based on employment data analysed from 2005 to 2015. Surprisingly, unemployment rate is alarmingly high among the skilled workforce ie, people with at least a graduate degree, which saw a three per cent rise from 10.39 per cent in May-August 2017 to 13.17 per cent in September-December 2018. The key issue here is employment generation but employability of the workforce, too, continues to remain a major challenge.
Unlike any developing country in the world, India has all the right resources such as low-cost labour, abundant human capital and an insatiable appetite towards entrepreneurship. But the rising requirement for the right kind of skillset often prevents us from reaching our full potential. In this regard, it should be noted that the Government’s flagship programmes such as Skill India, Startup India and Standup India were launched with the right intent and in accordance with the changing demands of the labour market. However, these initiatives could not address the key issues at the grassroots level.
In the last 25 years, particularly after the liberalisation of the economy, India witnessed rapid growth and the benefits of the boom years trickled down to the poor and the marginalised, thus lifting thousands of people from the clutches of poverty. Like in every economy, there comes a time when the growth momentum slows down, giving rise to unemployment, income inequality and disquiet among the people. After years of double-digit growth, China’s real growth slowed down to 6.6 per cent in FY18 from the double-digit growth of nearly 14.2 per cent in the last decade.
In the wake of the internet revolution that engulfed the world, India’s youth showed remarkable inclination and desire to embrace it, thereby laying the foundation of a ‘New India’, strongly rooted in new-age technologies of the century. However, the digital dividend, which could have potentially become the backbone of ‘New India’s’ growth story, remained underutilised. A large majority of the population even today lives in rural areas where the lack of basic infrastructure, connectivity and employment opportunities continues to dominate their daily lives. The ‘New India’s’ foundation, therefore, should be laid on a mission to generate adequate employment and equal growth opportunities for the people. It is, therefore, important to identify the crucial links in the chain that could at various stages in an individual’s life ensure the infusion, stimulation and development of the right kind of skill.
The Government must opt for a three-pronged approach to generate employment and ensure employability of the of workforce:
Promote skill-based education
Educational institutions should lay greater emphasis on nurturing employability and skill development of the pupils, while equally focussing on academic excellence. One of the drawbacks of the Indian education system, at times even acknowledged publically, is that the focus remains centered on academic excellence, and not preparing the child for an uncertain future.
A 2019 ‘Annual Employability Survey’ report by Aspiring Minds says that there has been no change in the employability prospects of Indian engineering graduates in the past nine years, with only a handful of them possessing next-gen tech skills. Nearly 80 per cent of Indian engineers are not fit for any job in the knowledge economy and only 2.5 per cent of them possess tech skills in Artificial Intelligence (AI) required by the industry. Not possessing the right kind of skill set will result in economic redundancy and subsequent displacement from the job market.
Moreover, schools and colleges in rural India, even in metros, are yet to awaken to the opportunities and threats that rapid growth in technology will bring about. Yuval Noah Harari, in his latest book, ‘21 Lessons for the 21st Century’ says that we have no idea what the job market will look like in 2050. It is generally agreed that machine learning and robotics will change every line of work. Therefore, it is high time that we revisit our traditional schooling system and replace it, in a phased-out manner, with a curriculum that is conducive to and promotes a holistic growth of the children.
Promote bilateral ties to export talent
With 1.3 billion people, India enjoys a strong and distinctive demographic profile in the world, offering it an edge over other countries that are grappling with an ageing population. This throws open the doors of exporting talent and increasing the scope of remittances. The Ministry of Skill Development and Entrepreneurship is believed to be working on a policy framework to officially seek the Cabinet’s approval to export talent. Once implemented, this will help millions of Indians find jobs abroad and earn a decent living. However, this needs to be thoroughly thought out and bilateral agreements need to be put in place to facilitate smooth movement of workers. Such agreements will ensure job opportunities for Indian employees and address the challenges arising out of a shrinking workforce. This will be a great way to potentially tap the demographic dividend.
Recently, the German Cabinet announced that it is coming up with an immigration proposal to help non-EU immigrants to move to Germany. To liberate the labour market and to fill the job vacancies, the country will ease the immigration and work permit process for skilled workers. This hints at a likely change in the stringent immigration policies in most countries to attract skilled workers.
Focus on manufacturing and agriculture sectors
A major part of India’s population is reliant on agriculture and allied activities for livelihood. Manufacturing and agriculture together account for 33.8 per cent of India’s Gross Domestic Product (GDP). In view of the changing geo-political dynamics and trade protectionism, it is important to shift the focus to manufacturing and agriculture sectors that have immense employment generation potential. China, for example, is now focussing more on reforming its agriculture sector and introducing modern farming methods with a greater emphasis on sustainable agricultural practices. After all, feeding 1.3 billion people will be a herculean task if it’s not prepared.
Technology has a great role to play in modernising the two key sectors for India. Policy reforms should be introduced and incentives should be provided so that migrations into cities in search of better job opportunities can be minimised. This will ultimately result in a self-sustaining practice wherein the country will be able to meet its increasing food demand and provide its people with employment opportunities.
In conclusion, India has set an ambitious target of transforming itself into a $5 trillion economy by 2025. This may seem unachievable but with the right kind of reforms, policy interventions and focussed approach, it may become a global economic power and provide its people with adequate employment opportunities.
(The writer is a communications professional)
