Employment is the source of growth of the nation. The drastic recession of the country during the Covid 19 phase has taken employment to nadir. Employment is the need of the hour as the unemployed workforce is downfall productivity of the nation. The rising population should ensure rising demand and thus, an increase in supply and employment. But this phase of falling employment with rising population and stagnant demand is a spiral that would continue if not handled with an effective and efficient policy.
In order to tackle the complexities of unemployment while charting out ideas for creating an employment hub nation, the Center for Work and Welfare(CWW) at IMPRI Impact and Policy Research Institute, New Delhi, organized an online discussion on The Need for a National Employment Policy the state of employment and Livelihood– #Employment Debate series on 12 August 2021.
Prof S K Sasikumar, Senior Fellow, V.V. Giri National Labour Institute, Noida, Uttar Pradesh magnificently pointed out the need for a coherent policy framework on an employment-intensive recovery and growth strategy. He suggested that this should be the cornerstone around which the National Employment Policy should be conceived. In fact, the current situation is the most opportune time for the National Employment Policy as technology is transforming the work and work relations, highlighted more so in the face of the pandemic and the global economy is slowing down after the financial crisis, with investment falling.
He further went on to emphasize the first prerequisite of the National Employment Policy which is the need to restore the balance between quantity and quality of employment which has been deteriorating since 2011-12 and real wage growth falling.
Linking the National Employment Policy framework to Macroeconomic policies, he highlighted that in the last three decades, the policy framework has excessively favored excessive use of capital relative to labor. Even though this led to an increase in growth, but the simultaneous distortion in factor prices could not be ignored. In fact, the incentive has shifted to using more capital as against labor. This can clearly be seen in the context of manufacturing which sadly employs only about 12% of our total workforce, the major growth being restricted to capital-intensive sectors of manufacturing. Hence, a job-rich recovery merits sectoral diagnostics and analyzing those sectors which have employment-intensive potential.
He also brought to everybody’s attention the growing informalisation of the Indian economy, especially within the formal sector which is a recent phenomenon. Even though agriculture employment has been declining, most of the workers have ended up landing in the construction sector which itself is unorganized.
Prof Sasikumar suggested that we need to identify the challenges and opportunities within each of the five pillars around the National Employment Policy and need interventions to strengthen these pillars. For employability, India should focus on demand responsiveness. The apprenticeship system has not picked up in India and the state of instructors is not very good. In terms of employment, a low female labor force participation rate is a cause of worry. There is a need to leverage technology as it is generating new forms of employment particularly platform labor. Promoting platform labor has the potential to significantly raise the Female Labor Force Participation Rate.
Besides, the existing social security system which is contingency-based is not working in India. The ones at the top end of the occupational spectrum with very low insecurities have the best social security schemes as opposed to those at the bottom of the pyramid. When it comes to active labor market programs, care and education need to be factored in within the public employment programs. Furthermore, public employment exchanges did not serve their function. Technology-enabled national carrier service should become the pivotal point for job-matching. Lastly, working conditions, especially of the vulnerable sections including migrant workers need to be pitched in as a crucial pillar.
Prof Sasikumar stressed the importance of technology. Workers should be a part of on-the-job training even in smaller firms and should be technology efficient rather than relying on traditional methods of work.
In addition, evaluation and monitoring of the policies demand utmost attention as it will enable us to understand whether the existing data structures are sufficient enough to understand the movements within the five pillars.