Clarion call for a NEP

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Clarion call for a NEP

Wednesday, 29 July 2020 | Balwant Mehta | Arjun Kumar

Clarion call for a NEP

The National Employment Policy has to formulate a link between policy options, budgetary allocations and/or financial mechanisms, considering the convergence among sectors

Soon after the 2008 global financial crisis, 63 countries prepared a National Development Framework or National Employment Policy (NEP) to create a road map for employment generation, says the International Labour Organisation (ILO). There is evidence that other nations, too, are moving away from tackling employment issues solely through the use of active labour market policies. They are moving towards development and are adopting comprehensive NEPs, bringing together various sectoral measures, programmes and institutions that influence the dynamic demand and supply of labour and the functioning of the labour market, responding to the short, medium and long-term prospects and priorities.

The proposal to bring the NEP in India was introduced in 2008 during the first tenure of the UPA. An inter-ministerial group had examined the proposal but nothing concrete had emerged from it. In UPA-II, the then Minister of Labour and Employment Mallikarjun Kharge had said in the Rajya Sabha in 2010 that the NEP was under consideration. In 2016, the idea of the NEP took shape at the first meeting of the BRICS employment working group, after which the NDA Government started to work on it. Since then, the Government, policy makers, industry bodies, media and other stakeholders are continuously debating and rooting for a comprehensive NEP policy document.

The country needs one more than ever now as it is facing the dual challenge of the highest unemployment rate in the last 45 years and the onerous task of generating jobs for around 10 million entrants in the labour force every year. Other important issues are jobless growth, structural transformation, underemployment, informal employment, skilled workforce, high levels of educational enrolment and aspiration of the youth, sectoral issues, decent jobs and so on. In addition, the participation of women in the workforce is not only low but also declining since the 2000s. In this context, a NEP with a practical vision and a comprehensive macro-economic and sectoral policy roadmap for achieving the country’s employment goal is urgently required.

COVID-19, employment and livelihood: The Indian economy had slowed down before the outbreak but the ongoing pandemic has pushed it further into a recession. As per the data from the  Centre for Monitoring Indian Economy (CMIE), the employment rate skyrocketed to 23.5 per cent in the months of April and May, owing to the hard lockdown. Apart from this, the CMIE has also estimated that 27 million youths in the age bracket of 20-30 years lost their jobs in April because of the lockdown. This will have a greater impact on livelihoods in the future.

Further, these problems differ across regions and sectors of employment. Therefore, recognising these challenges and putting in place appropriate policy responses to tackle them are a priority. As multiple forces ranging from technological advances, climate change to demographic changes transform the world of work, the absence of a decisive policy action will further disrupt livelihoods and exacerbate inequalities. The Government needs to take appropriate steps urgently to assess the current employment situation in the country, including the macroeconomic environment, demographic context and sectoral challenges in employment generation, following which it will set targets and monitor them.

NEP amid the pandemic: Given the huge job losses due to the contagion’s socio-economic impact, assisting the labour force is important during this crisis. Since numerous social protection programmes are already in place for workers, a NEP would be important for understanding the dynamics of benefits for workers, employers and the Union and State Governments.

The recent push for a NEP on a fast track basis by the Minister of Labour and Employment is a welcome move. The Labour Minister has asked officials to look at the employment policy while keeping in mind the challenges and disruptions that have occurred because of COVID-19. India has ample intellectual and practical knowledge to formulate a policy that takes into consideration gender, caste and ecological concerns. The lack of such a policy could result in a warped economic transformation, resulting in avoidable stress on employment, social and gender harmony.

Labour empowerment: It is very important to have an inclusive policy, which caters to the challenges and needs of the marginalised, women, divyangs (physically challenged) and so on. The aspirational districts and the priority sectors needing more attention must be identified. This will go a long way in achieving the principles of ‘Sabka Saath, Sabka Vikaas, Sabka Vishwas (together with all, for the development of all and with the trust of all)’. The NEP will have an immense advisory role and create road maps for clarity. Moral persuasion and appropriate signalling are important to ensure consistency, predictability, stability and a strong future outlook for ensuring confidence at par with India competitors. This would detail the direction of the economy in a holistic manner.

New investment areas, entrepreneurship, innovative initiatives, start-up ecosystems, gig economy, conventional sectors, studies and projects would identify the new and emerging focus areas for continuous feedback into the system.

Research and development is the core of the NEP. The policies and schemes of relevant Ministries and committees need to be streamlined and studied to collect evidence and provide essential inputs for policy-making since it is an ongoing process.

The NEP will also be crucial for implementation, monitoring and evaluation. This is important for Digital India’s objectives and outcome-based decision- making as per the Ministry of Statistics and Programme Implementation and NITI Aayog’s recent efforts for data and planning. For this, the maintenance of a real-time database and repository and monitoring of the employment status of the labour force is important. It would require enormous efforts in the beginning but would yield more than proportionate results in the immediate future.

In times of disasters and State and national emergencies, the NEP would provide a backbone and architecture to complement the efforts of the Government and maximise relief to the affected families and enterprises. This would minimise economic losses and optimise the use of limited resources. This would complement the Prime Minister’s vision of a New India and help in achieving the $5 trillion economy with special emphasis on “labour respect and empowerment.”

Atma Nirbhar Bharat and New India: The NEP can provide a comprehensive framework, with inclusive and sustainable planning, an enabling environment and a holistic, impactful approach towards decent employment and the vision of a New India. The Sustainable Development Goal (SDG) eight focusses on promoting sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all. The consultation paper for the draft National Urban Policy Framework, 2018  is an important document template for the NEP to start taking shape. In the past, most policy documents pertaining to the NEP, by and large, have been suggestive in nature.

There is an urgent need for a comprehensive NEP, based on responsive real-time data analysis, integrating sectors that will help emerging sectoral employment policies and programmes amid the COVID-19 pandemic. The preparation of the NEP warrants a broad-based national consensus among various stakeholders. This can be ensured through a consultative process by taking various stakeholders’ views and the constituents’ demands into consideration during the policy formulation process.

The most important part of the NEP is to formulate a link between policy options, budgetary allocations and/or financial mechanisms, considering the convergence among various departments or sectors. Further, an institutional framework detailing roles and responsibilities for the implementation and monitoring of progress should also be part of the policy document.

Such a policy document will effectively help in formulating appropriate employment strategies which ensure decent work, empowerment and sustainability towards an ‘Atma Nirbhar Bharat’ and contribute significantly towards achieving the goals of the 2030 Agenda for Sustainable Development.

(Mehta is Research Director and Kumar is Director, IMPRI)

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