Date: 27/10/2022

Relevance: GS-2: Issues Relating to Development and Management of Social Sector/Services relating to Education and Human Resources.

Key phrases: Industry, Employment generation, International markets, Unemployment, Quality of jobs and quality of income, Centre for Monitoring Indian Economy, Investments, Employment gap, Skill training, Micro, small and medium enterprises.

Why in News?

• A favourable policy environment for businesses to start and grow with ease, and a bigger footprint in international markets will help.

Employment Situation in India:

• India faces challenges of unemployment, quality of jobs and quality of income.
• Data from Centre for Monitoring Indian Economy (CMIE) show that 19 lakh people had lost their jobs in August 2021 alone; of this, 10 lakh were from the industrial sector. In July, eight lakh people in this sector lost their jobs.
• India’s industrialisation has been different from that of the rest of the world. The World Bank has calculated that the industrial sector, which contributed 18 per cent to India’s GDP in 1995, is now contributing only 13 per cent. In other countries, there has been no such reversal in contribution. For example, China moved the largest number of workers from farms to factories and became a manufacturing hub of the world.
• In India, CMIE statistics reveal that employment in agriculture, which accounted for 35 per cent of total employment in 2017-18, increased to 39.5 per cent in 2020-21.
• Due to Covid, many industrial units have closed down and pressure on agriculture has increased. As a result, incomes in villages are falling and the purchasing power is weakening.

Government Initiatives for Employment Generation in India:

• Aatmanirbhar Bharat package
  • The Government of India has announced Aatmanirbhar Bharat package to provide stimulus to business and to mitigate the adverse impact of Covid 19.
  • Under this package, the Government is providing fiscal stimulus of more than Rs. 27 lakh crore.
  • This package comprises various long term schemes/ programmes/ policies for making the country self-reliant and to create employment opportunities.
• Garib Kalyan Rojgar Abhiyaan
  • The Government launched the Garib Kalyan Rojgar Abhiyaan (GKRA) of 125 days on 20th June, 2020 to boost employment and livelihood opportunities for returnee migrant workers and similarly affected persons including youth in rural areas.
• Mudra Yojana
  • Pradhan Mantri Mudra Yojana (PMMY) is being implemented by the Government for facilitating self-employment. Under PMMY, collateral free loans upto Rs. 10 lakh, are extended to micro/small business enterprises and to individuals to enable them to set up or expand their business activities.
• Gati Shakti
  • PM Gati Shakti is a transformative approach for economic growth and sustainable development. The approach is driven by seven engines, namely, Roads, Railways, Airports, Ports, Mass Transport, Waterways and Logistics Infrastructure. This approach is powered by Clean Energy and Sabka Prayas leading to huge job and entrepreneurial opportunities for all.
• The Government of India is encouraging various projects involving substantial investment and public expenditure on schemes like Prime Minister’s Employment Generation Programme (PMEGP) of the Ministry of Micro, Small & Medium Enterprises, Deen Dayal Antodaya Yojana-National Urban Livelihoods Mission (DAY-NULM) of the Ministry of Housing & Urban Affairs etc. for employment generation.
• Besides these initiatives, various flagship programmes of the Government such as Make in India, Digital India, Smart City Mission, Atal Mission for Rejuvenation and Urban Transformation, Housing for All, Infrastructure Development and Industrial Corridors are also oriented towards generating employment opportunities.

Measures needed to increase employment:

• Favourable business environment
  • Reforms should be introduced to shift workers from low income agriculture to the high paying industrial sector. To achieve double-digit growth in the industrial sector, the Centre rolled out the ‘Make in India’ scheme. Along with this, a favourable environment should be created for domestic business to start and grow with ease.
• Investments
  • Doors should be opened for new investments. Physical and social infrastructure should be expanded. Only when the Central and State governments do so, the industrial sector will witness smooth growth.
• Employment gap
  • The industrial sector should plug the employment gap. By providing quality products, the sector should grow to a level where it can gain a large share of the international market and provide employment to lakhs of people.
  • The government should identify the problem areas preventing such growth and remove them quickly. For the industrial sector to boom, favourable policy measures should be taken.
• Quality centres
  • Quality products are always in demand in the international market. Chinese industries have ramped up the quality of their products, boosting, in the process, exports to American and European markets. India should establish quality centres across the country soon.
• Skill training
  • Micro, small and medium enterprises (MSMEs) should be supported in these hubs by providing adequate investment and skill training.

Way Forward:

• At present, the Central and State governments provide various subsidies to encourage setting up of industries. Henceforth, the more jobs the industries create, the more subsidies should be given.
• Also, subsidies should be given on the basis of production achieved in a given period and the quality of goods manufactured. Similar subsidies can be provided to service sector units that are closely linked and coordinated with the industrial sector.
• With these incentives, the industrial sector can be transformed into a major employment generator. India cannot achieve balanced and well-rounded development without propping up the industrial sector.

Source: The Hindu BL

Mains Question:

Q. Discuss the issues related to decreasing employment in India. How industry can contribute more to employment generation in the economy?