Syllabus
GS Paper 3 – Growth, Development and employment.
Applications where to apply?
When asked about
– Unemployment
– Income Inequality
– $ 7 trillion economy
-Economic growth
Context
India faces a significant challenge in creating enough jobs to sustain its burgeoning population.
Source
The Indian Express | Editorial dated 13th April 2024
India’s missing jobs — and where the next government can find them
India’s economy is on track to become the world’s third-largest, characterized by rapid growth, a youthful population, extensive smartphone usage, and a burgeoning billionaire class alongside persistent poverty. Despite these positive indicators, only 46.6% of the working-age population is actively employed, diminishing the economy’s overall vitality compared to other emerging markets where the employment rate is closer to 70%.
Challenges in Employment
- Skills Deficit in the Workforce:
- Despite India’s large workforce of approximately 950 million, there is a notable skills deficit hindering employment opportunities.
- The 2023 India Skills Report revealed that only half of young Indians are considered employable, indicating a gap between the skills possessed by the workforce and those demanded by employers.
- This deficit not only affects high-end services sectors but also impacts the availability of skilled labor across various industries, constraining economic growth and job creation efforts.
- Reliance on Low-Skilled Services:
- With limited opportunities for skilled employment, many individuals are forced to seek work in low-skilled service sectors.
- Construction, street vending, domestic labor, and similar occupations serve as the primary sources of employment for a significant portion of the population.
- However, these roles often offer minimal wages and lack opportunities for upward mobility, perpetuating cycles of poverty and income inequality .
- Crisis in IT Sector:
- India’s economic development strategy has largely focused on services rather than traditional manufacturing-led growth. However it has contributed to jobless growth.
- The IT sector, once a pillar of India’s services economy, is experiencing its first contraction in 25 years, attributed to automation and artificial intelligence displacing traditional roles and slowing demand for new hires.
Policy Recommendations for Job Creation
- High-End Services Exports:
- Global Capability Centres (GCCs), which provide a range of services to multinational corporations (MNCs), present significant growth opportunities, with the potential to employ millions by 2030 and stimulate demand for lower-skilled services.
- Global Capability Centres provide services to the parent that range from finance, legal and HR to high-tech innovation clusters in cyber, analytics and AI.
- There are already over 1,500 GCCs employing 1.6 million people, expected to grow to 4.5 million by 2030.
- Services out of such centres could become one of India’s biggest exports, generating incomes and demand for even more services from lower-skilled tiers.
- Tech Startups:
- Despite recent setbacks, India’s tech startups offer potential for job creation, particularly in industries like AI, Software as a Service (SaaS), defense, and green technology.
- They can employ many people directly and indirectly.
- Green Transition:
- India’s commitment to renewable energy presents an opportunity to create millions of new jobs in the green economy , including roles in renewable energy production, hydrogen production, and emissions reduction.
- The World Economic Forum projects 50 million net new “green economy” jobs in India.
- Reviving Manufacturing:
- Small and medium-sized manufacturers should be supported to become reliable job creators
- Small and medium manufacturers are likely to be less automation-intensive and more reliable labour absorbers.
- India’s digital public infrastructure , Open Network for Digital Commerce that connects market players on a single protocol — can be leveraged for access to credit, resources, logistics, warehousing and customers. This can help small-and-medium manufacturers replicate the benefits of larger players.
- Focusing on structural aspects like providing requisite skill training , investing more on education and provide tax and regulatory incentives to employers.
Conclusion
India’s economic future hinges on its ability to address the pressing need for job creation through a multifaceted approach, including fostering high-end services exports, nurturing tech startups, embracing the green transition, and revitalizing the manufacturing sector. Policymakers must prioritize initiatives that not only generate employment but also promote inclusive growth and skills development to ensure long-term prosperity.
Related Topics
Open Network for Digital Commerce (ONDC)
It is an open-source network set up to enable buyers and sellers to transact with each other irrespective of the e-commerce platform on which either of them are registered.
- It will enable local commerce across segments, such as mobility, grocery, food order and delivery, hotel booking and travel, among others, to be discovered and engaged by any network-enabled application.
- It is an initiative of the Department for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce and Industry.
- It comprises of buyer-side apps where consumers can place orders, seller-side apps that onboard merchants and display their listings, and logistics platforms that handle deliveries.
Read More: Do subsidies and safety nets take focus away from generating jobs
References
Related PYQ
Most of the unemployment in India is structural in nature. Examine the methodology adopted to compute unemployment in the country and suggest improvements? [ UPSC Civil Services Exam – Mains 2023]
Practice Question
Critically evaluate India’s current job creation strategies in light of its employment challenges and economic goals. [150 words]
How to approach this question?
Introduction (50 words):
- Start by briefly outlining India’s current job creation strategies and the context of its employment challenges.
- Mention the economic goals that India aims to achieve.
Body (70 words):
- Critically analyze how the current job creation strategies address the employment challenges. Discuss the effectiveness of these strategies in achieving India’s economic goals.
- Use data and examples from the search results to support your analysis.
Conclusion (30 words):
- Conclude by summarizing the main points of your analysis.
- Suggest improvements or alternative strategies, if any, for better alignment of job creation strategies with employment challenges and economic goals.
Remember to provide a balanced answer, incorporating relevant facts and figures, and propose feasible solutions. Structure your answer well, with a clear introduction, body, and conclusion. Also, ensure that your answer is within the word limit specified for the exam. Good luck!