A ground plan for sustainable mass employment

A ground plan for sustainable mass employment

Context

The recent Budget announcement unveiling five major employment-related schemes with an ambitious ₹2 lakh crore outlay over five years highlights the government’s commitment to addressing the employment crisis.

• These schemes aim to provide jobs, skills, and opportunities to 4.1 crore youth across the country.
• The Economic Survey has strongly advocated for job creation, urging the private sector to take the lead, citing factors like lower taxes since 2019 and higher profits post-COVID-19.

Relevance:
GS-02 (Government policies and interventions)

Dimensions of the Article

• Key highlights about Sustainable Mass Employment
• Budgetary Allocations
• The Concerns and Challenges

Key highlights about Sustainable Mass Employment

• It’s not just about generating jobs but ensuring that these jobs offer a decent standard of living and are backed by strong public infrastructure and social safety nets.
• The journey towards such employment begins by addressing the “race to the bottom” on wages, particularly when unskilled labor is abundant.
• The Periodic Labour Force Survey (PLFS) 2019-20 revealed a stark reality: an individual earning ₹25,000 a month falls within the top 10% of wage earners in India.
• This highlights the severe wage disparity and the challenge of ensuring a life of dignity for the majority.
• Short-duration skill programs have been widely criticized for their low placement rates, with many participants returning to their villages due to the inadequacy of wages in urban areas.
• The root of this problem lies in the disconnect between education, skills, and employability. States like Tamil Nadu, Kerala, Himachal Pradesh, Goa, and Sikkim, which boast better human development indicators, also have the highest monthly per capita consumption.
• This is in stark contrast to states like Odisha, where despite efforts to promote skilling, per capita consumption remains low due to the lack of robust higher secondary, higher, and vocational education opportunities.

Budgetary Allocations

1. Total Outlay: The Budget has allocated a substantial ₹2 lakh crore over five years for five major employment-related schemes, aimed at facilitating jobs, skills, and opportunities for 4.1 crore youth.
2. Focus on Skilling: A significant portion of this budget is dedicated to skilling initiatives, reflecting the government’s recognition of the need to enhance employability through skill development.
3. Integration with Existing Schemes: The Budget also emphasizes the convergence of these new schemes with existing ones, particularly in sectors like education, health, and nutrition, to ensure a holistic approach to human development.
4. Support for Women and Marginalized Groups: Special provisions are included in the budget to support women-led enterprises and first-generation entrepreneurs, with streamlined access to working capital loans.
5. Public-Private Partnerships: The Budget encourages collaboration between the government and the private sector, particularly in the area of apprenticeships, to ensure that skilling programs are aligned with industry needs.

The Concerns and Challenges

• While the Budget’s employment schemes are ambitious, there are several concerns and challenges that must be addressed to ensure their success:
  • Wage Disparity: One of the most pressing issues is the “race to the bottom” on wages, exacerbated by the availability of unlimited unskilled labor. The PLFS 2019-20 found that a wage earner is in the top 10% if they earn ₹25,000 a month, highlighting the severe wage disparity in India. Low wages in urban areas often force individuals to return to their villages, despite having undergone short-duration skill programs.
  • Skilling vs. Education: There’s a clear continuum between education and skills that needs to be addressed. States with better human development indicators, such as Tamil Nadu, Kerala, and Himachal Pradesh, also report higher monthly per capita consumption. In contrast, states like Odisha, despite pushing short-duration skilling programs, suffer from low per capita consumption due to the absence of robust higher secondary and vocational education opportunities.
  • Quality of Public Goods: Sustainable mass employment cannot be achieved in isolation. There is a strong correlation between the availability of quality public goods (education, health, nutrition, environment, and sanitation) and employment outcomes. India’s failures in these sectors need to be addressed through increased investment and a decentralized approach to community action.
  • Skilling Infrastructure: The quality of skilling infrastructure, particularly in Industrial Training Institutes (ITIs) and polytechnics, remains a critical gap. Many of these institutions lack up-to-date infrastructure and resources, which hampers their ability to provide relevant and effective training.
  • Public Employment: The state has a role in determining the floor rate of wages and ensuring high-quality public goods. Evidence suggests that public employment per unit of population in India is much lower than in most developed countries, which impacts the overall employment landscape.

Suggested Measures

• Decentralized Skilling Initiatives: Gram sabhas in rural areas and basti samitis in urban areas can play a critical role in identifying skilling needs and ensuring that government programs reach the intended beneficiaries. Professionals should be appointed at the local government level to ensure evidence-based outcomes.
• Convergence of Initiatives: There should be a convergence of initiatives for education, health, skills, nutrition, livelihoods, and employment at the local government level, with a focus on women’s collectives.
• Vocational Education in Colleges: Need-based vocational courses and certificate programs should be introduced alongside undergraduate programs in every college.
• Standardization of Healthcare Training: This will not only improve the quality of healthcare in India but also open up opportunities for healthcare professionals in the global job market.
• Community Cadres of Caregivers: Create community cadres of caregivers to run crèches universally, enabling women to work without fear. These caregivers can be paid by local governments or women’s collectives after intensive training, ensuring that children are well cared for while their parents work.
• Enterprise and Start-Up Skills in Schools: Introduce technology and enterprise as subjects in high schools to prepare students for the job market. Professionals should be brought into schools to impart finishing skills, ensuring that students are ready for employment or entrepreneurship upon graduation.
• Streamlined Working Capital Loans: Simplify the process of obtaining working capital loans for women-led enterprises and first-generation entrepreneurs. This will enable them to scale their businesses and contribute to the economy.
• Enhanced Utilization of MGNREGA Funds: Utilize 70% of MGNREGA funds in water-scarce blocks and areas with high deprivation, focusing on individual beneficiary schemes that provide livelihood security. Skills training for MGNREGA wage earners should be prioritized to improve productivity and ensure a life of dignity.