Currently, 67% of India's population is of working age -- between 15 and 64 years old, and creating enough jobs is a big challenge. Here's how IMF says it can be done.
Union Minister Nitin Gadkari recently tried to make a point about Maratha reservation that it will not guarantee a person employment, rhetorically asking: Where are the jobs? He said that there are no jobs as Information Technology has taken over employment in banks and that the government recruitment is frozen. This, indeed, is a global problem as the world is entering the fourth industrial revolution of Artificial Intelligence and Robots.
But challenges in India galore. To begin with, young people in large numbers are joining the workforce every year. Currently, 67% of India’s population is of working age — between 15 and 64 years old. Given India’s demographic dividend, International Monetary Fund has said that the way for the government to support job market growth is by improving labour market regulations.
- $5 trillion economy dream still on: Piyush Goyal says India may have lost time, but not spirit
- Atma Nirbhar Bharat package report card: FinMin shows progress of credit guarantee, refinance, other schemes
- Atmanirbhar Bharat’s first boost to be made in China; 5 new urea plants to make India self-reliant
IMF’s India mission chief Ranil Salgado said that outdated, restrictive, and numerous laws thwart businesses from functioning efficiently, which in turn, lead to misallocation of resources and eventually end up hurting job creation prospects. He further said that outdated and restrictive laws push businesses activity into the informal and unregulated segment.
For better prospects, he said, India needs to streamline the “complicated web of labour laws”, which not only will promote employment but in the formal economy, and eventually help sustain growth.
In fact, Singapore’s Deputy Prime Minister Tharman Shanmugaratnam also observed at an event last year that “India’s labour laws are anti-employment”.
Ranil Salgado also argued that rigidities in law make it harder for women to join the workforce.
Many international bodies have pointed out that lack of women representation in the economy is hurting India’s growth prospects. A McKinsey Global Institute even pointed out that just by ensuring gender equality, India could achieve “an 18% increase over business-as-usual GDP, or a whopping $770 billion”.
The Narendra Modi government brought in many labour law reforms in the first two years — from striking off inspection system, implementation of Employee Provident Fund to six-month-long maternity leave to women employees. Meanwhile, India also jumped 30 ranks on the World Bank’s Ease of Doing Business index and broke into the top 100 on the list.
However, many more labour reforms such as the amendment to the Industrial Disputes Act and the implementation of the Labour Code are still hanging in balance. Moreover, the implementation of the Goods and Services Tax (GST) also disrupted economic activities temporarily.
In India, there is no official comprehensive data on jobs. The ones that are available — National Sample Survey Organisation (NSSO), Quarterly Economic Survey (QES), Employment Provident Fund Organisation (EPFO) and Centre for Monitoring Indian Economy (CMIE) — give piecemeal information on job creation and employment numbers. The government has formed a panel to explore ways to have more inclusive jobs data in the country.