Strike balance between employment & growth

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The government should focus on creating skilled workforce, in order to bring employment in sync with growth, said the Economic Survey 2007-2008, indicating that a record economic growth has not created adequate jobs. According to the Survey, the need of the hour is to increase the share of regular employees in total employment while correspondingly reducing casual employment.

The country has a labour pool of over 45 million, while the 11th Five Year Plan aims to create new job opportunities to the tune of 58 million. The government has kicked off a number of schemes, aimed at creating employment opportunities—both in rural and urban areas—in the last five years.

The Survey has also said that in case the country gets the skill development act right, it would be harnessing a demographic dividend. However, India would reap the benefits of this only after 2020 when ‘minors’ attain the working age. As per the survey, the proportion of population in the working age group of 15-64 years is increasing steadily and is expected to touch 68.4% in 2026, from the level of 63% in 2006.

Most developed and developing countries, including China, would witness a surge in ageing population and a significantly low working-age population. The Survey also pointed out that the employment growth in the organised sector has declined between 1994 and 2005. The survey also underlined the need to review labour laws and labour market rules.

As per the 11th Plan, employment in manufacturing sector is expected to grow at 4% while construction and transport and communication are set to grow at 8.2% and 7.6% respectively. The 11th Plan also emphasises on creating a pool of skilled personnel in appropriate numbers with adequate skills in line with the requirements of the ultimate users like industry, trade and service sectors. “Such an effort is necessary to support the employment expansion envisaged as a result of inclusive growth including in particular the shift of surplus labour from agriculture to non-agriculture,” Survey says.

Skilled labour force in the country is estimated at 5% of the total workforce at present. However, this is set to increase to 50% in the next five years. Earlier, Prime Minister Manmohan Singh said employment generation would be key to place the skilled workforce. The increase in skilled labour force would demand significant expansion in the employment scenario, analysts pointed out.