Job creation has been one of the priority areas for the Narendra Modi government, but the unemployment rate has only risen to 3.8% of the total estimated workforce of 48 crore in 2015-16. Sources said if the issue was not addressed promptly, it would rob India of its so-called demographic dividend.
India’s unemployment rate was 2.2% of the total workforce of 47.41 crore in 2011-12, according to the National Sample Survey Organisation. Unemployment rate is the number of persons without employment as a proportion of the workforce.
Sources said the spike in unemployment rate is reflective of the “job-less” growth which only highlights the government’s humongous pending task to reap the much-touted demographic dividend.
Labour Bureau data had in April revealed that employment generation has actually fallen to a six-year low of 1.35 lakh in 2015. In 2014, 4.21 lakh new employments were created, while the figure was 4.19 lakh in 2013.
The decline in job creation in 2015 could be attributed to steep fall in the number of jobs in labour-intensive areas such as leather, automobiles, gems and jewellery, transport and handlooms/powerlooms.
The Labour Bureau, which compiles data every quarter on eight selected sectors — textiles including apparel, leather, metals, automobiles, gems and jewellery, transport, IT/BPO and handloom/powerloom — also found that the October-December period of the last year was the worst fourth quarter in the last seven calendar years in terms of employment generation.
Concerned with the growing menace, highest functionaries of the government led by the Prime Minister’s principal secretary Nripendra Mishra will huddle together on Friday striving to find ways and means of creating employment across all sectors of the economy.
Sources said NITI Aayog vice-chairman Arvind Panagariya will make a presentation during the meeting which would be attended by chief economic adviser Arvind Subramanian and secretaries of finance, labour, agriculture and industry among others.
In his Independence Day speech, PM Modi is likely to announce steps towards improving the employment scenario.
The government has in the recent past taken a series of steps, including embarking on a major labour reform initiative, to improve employment, but the target remained elusive.
FE had earlier reported that the Modi government, which ushered in full-benefit fixed-term jobs in the labour-intensive garment sector as part of an incentive package announced recently, is planning to extend the policy across industries, aimed at creating more employment.