Employment Creation
By Dhurjati Mukherjee
How soon will the Modi government convene the Indian Labour Conference, is a question weighing on trade unions’ mind.A tripartite output of the government, employers and employees last held a meeting in 2015, a gap of six long years. The government’s apathy to hold negotiations on various issues related to labour comes at a time when there are country-wide demands for implementation of the unorganised workers’ database as also their present conditions of work.
The Centre must remember that being a founding member of the ILO it had traditionally “upheld the high ideals of tripartism” and that ILC was held every year or after two years in exceptional circumstances. Burning issues related to labour, such as migrant workers, labour codes, loss of jobs and wage reduction during the pandemic, social security, increasing marginalisation of women workers etc. need urgent attention.
The CMIE in its latest employment data releasedfound that nearly 19 lakh people lost jobs in August with the manufacturing sector the worst affected. Unemployment rate had climbed to 8.32 per cent, which is similar to the post lockdown figure of 8.35 per cent recorded around this time last year. The number of employed persons decreased from 39.97 crore in July to 39.78 crore in August, which indicates that 19 lakh people lost their jobs over the past month.
Since the days of under Nehru, all available capital was reserved for heavy industry which created few jobs for the unskilled. Simultaneously, the demand for light industry products and services remained constrained by domestic incomes, which grew at a snail’s pace. The situation did not change significantly since then and unemployment coupled with underemployment remained a critical problem.
The post pandemic scenario has forced the employment oriented micro, small and medium enterprises sector with no option but to reduce labour and also wage costs to remain afloat. Informal sector workers, self-employed and daily wage labourers have been significantly affected. The unemployment rate, as per CMIE, stood at 8 per cent in mid-August, marginally higher than 7-8 per cent in February 2020 (pre-pandemic).
Experts believe that even the present figure appears to be gross under estimation. Obviously a widespread recovery in the jobs market will likely to be slow and gradual. Vaccinating a majority of the adult population is widely expected to reach at least 75 per cent by year end and, until then, the economy remains vulnerable to pandemic shocks. As such, the possibility of job creation appears rather bleak as companies would only go for hiring as and when demand picks up.
The little recovery may be for formal sector workers and not for their counterparts in the informal sector. Within the formal sector, a faster boom is likely in sectors with greater demand for e-commerce, IT software and pharma. Thus, whatever jobs that may be created would be in the above sectors. However, traditional sectors like infrastructure, hospitality, real estate, entertainment etc. may be slower to recover where possibility of job creation appears bleak.
Many small traders and businesses have permanently shut down or reduced their operations to below 50 per cent, leaving sharp reduction in jobs. Pandemic will obviously leave long-lasting effects, which politicians and bureaucrats are yet to comprehend. Workers, as has been emphasised, will need both reskilling and upskilling, which has, however, been taken up by the present government. The Centre’s flagship skill development programme over the past six years has been less than 50 per cent against the target of 70 per cent, and this was stated by the government in Parliament. Academics say this wasn’t surprising because training under the short-term training programme of the Pradhan Mantri Kaushal Vikash Yojana was superficial, short and often at odds with the industry’s demands. Skill Development Minister, Dharmendra Pradhan, informed the Lok Sabha that 65.95 lakh candidates had enrolled under the programme but only around 44.3 per cent of those certified got jobs.
The locomotives for employment generation are public infrastructure spending, exports and consumption demand. None of the above two sectors are expected to grow in as demand takes time to pick up. The thrust lies in evolving a viable strategy for small and micro units to thrive and grow. A change of course away from neo-liberalism is necessary, which would require evolving an alternative State that enjoys the support of workers, peasants and petty producers and sections of middle class wishing to break away from neo-liberalism. Only then will jobs be created as the young workforce has been growing and needs to be employed. More jobs will also need to be created in the realm of physical infrastructure development and construction sectors.
The labour and farm laws as well as production linked incentive scheme to stimulate manufacturing output and employment has had little effect. Moreover, the much-hyped Atmanirbhar Bharatscheme had had little effect in gearing up job creation. As regards state governments, except for a few, most of them have not been successful in promoting innovation and industrial development. States like West Bengal are more interested in dishing out subsidies rather than promoting cottage industries and reviving development and employment in rural and semi-urban areas.
The crux of the new strategy has very little change of boosting job creation. There may be some increase in employment in high skilled, emerging areas but in general there is little possibility of jobs being created as per emerging demand every year with new pass-outs. The situation is definitely grim for semi-skilled or unskilled workforce. If the present situation continues, there is little possibility of the health of the informal sector improving in the immediate future.
It is thus time that the government has to evolve a coherent policy of labour with special reference to job creation, specially for unskilled and semi-skilled sections, and this can to only be possible through encouragement of labour-intensive sectors. The thrust obviously has to be on various infra projects, hotel and entertainment industry, gems and jewellery making, electronics manufacturing, to the extent possible by reducing imports etc. There has to be a judicious strategy for small and micro units to thrive and grow in a big way. Unless there is manifest a determined effort at job creation, a section of the population may languish further.
The Global Commission on Future of Work which stated the need to adopt a human-centred approach “to survive in a carbon neutral, digital age and afford them dignity, security and equal opportunity. It must also meet the changing needs and challenges facing businesses and secure sustainable economic growth”. It categorically stressed the need to invest more in people’s capabilities — this means establishing an effective life-long learning system that enables people to skill, reskill and upskill, a system that spans early childhood and basic education through to adult learning. Informal workers and small businesses have to contribute and benefit in the sound formal economy. Moreover, more investments are required in the institutions of work, including the establishment and implementation of a universal labour guarantee, which our government is unfortunately not doing.
The challenge is indeed immense and the government will have to prove that growth is not oriented towards big business but also to such sectors where jobs can be created to help the common man. While reskilling and upskilling are good initiatives, this has to be backed with job creation in both formal and informal sectors. — INFA