The trend of jobless growth that has been distorting the Indian economy will pose a huge challenge in the next 3-4 decades. By 2050, the country will have a maximum 110 crore people in the working age group of 15-64 years. This will mean an increase of over 28 crore people entering the job market, but the question being asked is whether even half that number can find employment. In its latest Asia-Pacific Human Development report, the United tions Development Programme (UNDP) has shown that between 1991 and 2013, India’s working age population increased by 30 crore, but only 14 crore could be employed. So the Indian economy has a limited capacity to generate jobs, while around 10 lakh people are entering working age every month, according to Labour ministry data. The reason for the low employment ration is because the country’s growth has been mostly services-led. The higher end service sector jobs require well educated and skilled workers, while the lower end jobs come with poor pay. Either way, this sector cannot substantially fulfill the hopes of crores of job-seekers in a country that is primarily agrarian and in the lower middle-income category. The key to raise employment level lies in manufacturing, says the UNDP report, referring to Chi’s high job growth rate and reduction in poverty. Contributing only 15 percent to the country’s GDP and 11 percent to employment, Indian manufacturing has much scope to play a bigger role. So the rendra Modi government’s ‘Make in India’ and ‘Startup India’ campaigns can give a fillip to manufacturing, if these mage to stay the course.
Only low and medium level manufacturing are believed to have the potential to provide 10 lakh jobs a month that the country needs to absorb its growing, low-skilled workforce. However, the Modi government will have to brace for legislative battle and labour union resistance as it seeks to liberalize labour laws to aid manufacturing. According to a section of experts, the plethora of Central and state level labour laws have created a regulatory environment so intimidating that it drives away entrepreneurs wanting to set up factories and industries. To end the inspector-raj of corrupt officials, the government is said to be mulling only a handful of labour laws, make hiring (and firing) simpler, and redefine terms like ‘week’, ‘overtime’, ‘bonus’ and ‘wage’. Proposed labour law reforms are said to include proposals like factory owners not needing government approval to remove less than 300 employees at once, unions not to be registered without minimum support of 30 percent employees (presently 15 percent), the new Factories Act to apply on only those companies hiring more than 50 employees instead of 20 (as of now), and raising the overtime limit from 50 to 100 hours. Recently, Union minister of State for Labour and Employment Bandaru Dattatreya said that due to the stalemate in Parliament, the government will issue an executive order soon to raise minimum wage to Rs 10,000 per month for all contractual employees. While this would be a substantial increase from Rs 6,330 per month presently as per Central notification, labour unions have been demanding minimum wage of Rs 15,000. If the wage increase does come about, the proportion of increase for unskilled labourers compared to skilled and semi-skilled labourers will also bear close watching.
The UNDP has pointed out that in countries like India, Indonesia, Vietm and the Philippines, rising wage inequalities are closely linked to widening gaps in education. Without government intervention, inequalities in education will lead to inequalities in distribution of wealth and opportunities for human development, its report warns. As much as 84 percent of current jobs in India are in the informal sector. These workers are mostly low paid with no job security whatsoever. The UNDP report has highlighted some of the problems such employment leads to, particularly idequate protection for workers. It has called for universal registration of workers, formal binding guidelines for contracts between employers and workers, reform of social security laws, and harmonizing major labour laws for effective implementation. However, the market-friendly, neo-liberal economy put in place in India by successive governments at the Centre has made it easier for industrialists to go for contract labour even in non-contract jobs. A race of sorts has begun between states to adopt ‘labour reform’ measures to please investors and big business. The catch phrase in government circles nowadays is ‘ease of doing business’, even as politicians line their pockets in return for such facilitation. On the occasion of May Day, Prime Minister Modi lauded the hard work, determition and dedication of millions of ‘shramiks’ in the making of India. On earlier occasions, he has spoken glowingly of the ‘demographic dividend’ the country is enjoying with 60 percent of its population in the working age group. But this dividend will last only until 2050 before the population begins to age. In the meantime, the country has to find worthwhile and remunerative work for all these hands.