It is unlikely India’s unemployment problem is going to get better anytime soon. In the immediate term, the painfully slow pace of vaccinations as also fears of a third wave continue to stall business activity primarily in the informal sector. But even assuming the third wave isn’t as deadly as the second one was and the vaccination programme gathers momentum, smaller enterprises are going to take at least a couple of years to get back on track. Even when the economy is fully opened up, subdued consumer demand is likely to slow the recovery in services, which offers the maximum opportunity for employment; as is known, the services PMI contracted yet again, in July. Worryingly, many small enterprises might hire in smaller numbers, hurting the prospects of workers in the informal sector. This section of the population—numbering some 380 million—has been worst hit by the pandemic, and it is for them that the government has just launched the e-Shram portal.
Around 1.65 lakh workers signed up on the first day itself in the hope of benefitting from the welfare schemes of the states and the Centre. A database of workers is always useful, but what is really needed right now is a database that records skills. Even as we work to capture data on existing skills, the need of the hour is a mass skilling initiative which facilitates training primarily through not only mobile centres but also via physical workshops; the model that is up and running in every district of Jharkhand is a good example. Large business groups can be roped in and the CSCs can be aligned with these; the Tatas, for instance, have built a capacity for some 20-25 lakh. The programmes need to be seeded in the villages so that skills relating to agriculture, food processing and the food chain are taught. An electronic digital platform and an urban-rural job network would help businesses hire effectively by matching capabilities.
While rural India can absorb a certain quantum of the labour force, the bigger objective must be to bring as many workers into the organised sector as possible. India probably spends less than 1% of its GDP on skilling whereas even 7-8% is insufficient, especially if India has serious ambitions of being a part of the global supply chain. Also, employability in a digital world takes on a whole new meaning; the organised sector is automating rapidly, restricting headcounts to the bare minimum.
India, at present, may not have any factories that have completely moved to “lights-out manufacturing” and are fully automated, but, very soon, one may see some functions or even some shifts that don’t require any manual intervention as technology takes over. However, the government’s initiatives to boost manufacturing—such as the production linked initiative schemes—should absorb labour. But, with an eye on the future, workers need to be trained to be employable in high-technology sectors such as space, renewable energy, defence and atomic energy. Many of those, among the 10 million or so who have lost their jobs over the past year, are relatively young. One reason the younger lot have not regained jobs is their relative lack of experience. It may not be possible to train them for high-tech sectors, but it should be possible to make them employable in sectors such as textiles. While it might seem like there is excess labour, the workforce must be upgraded so that it is useful in the areas where it is needed.
