India, despite achieving an impressive and steadily rising economic growth in recent years, still faces the twin challenge of creating adequate decent employment opportunities for scores of young men and women joining the labour market every year and facilitating the transition from informal to formal employment for those already in the labour market. The youth presently make up close to 35% of the population and the Indian workforce is expected to increase to approximately 600 million by the year 2022 from the current estimated 473 million.
The structural transition from farm to the non-farm sector is suggestive of new emerging avenues for employment. The advances in technology are also affecting manufacturing and services sectors. The challenges imposed and opportunities brought forth by these transitions necessitate a comprehensive and convergent policy initiative synchronising various sectoral policies and programmes and giving a coherent vision to the country’s employment objectives and ways to achieve them. What we need is a National Employment Policy (NEP) that would encompass a set of multidimensional interventions covering a whole range of social and economic issues affecting many policy spheres and not just the areas of labour and employment. The policy would be a critical tool to contribute significantly to achieve the goals of the 2030 Agenda for Sustainable Development.
The underlying principles for the National Employment Policy may include enhancing human capital through skill development; creating sufficient number of decent quality jobs for all citizens in the formal and informal sectors to absorb those who are available and willing to work; strengthening social cohesion and equity in the labour market ; coherence and convergence in various initiatives taken by the government; supporting the private sector to become the major investor in productive enterprises; supporting self-employed persons by strengthening their capabilities to improve their earnings; ensuring employees’ basic rights and developing an education training and skill development system aligned with the changing requirements of the labour market.
What would the National Employment Policy address?
Analysing and Improving Labour Market Data
Availability of detailed, reliable, and comprehensive information on the labour market is critical to meet the employment challenge through well-targeted policies and programmes. At present, the dearth of statistical data on the labour market in India poses serious constraints to employment planning and promotion. The employment challenge faced by an economy can be gauged from the number of jobs required to be created to absorb not only the new entrants to the labour force but also to clear the backlog of unemployment and address the problem of underemployment.
The policy would lay stress on an effective Labour Market Information System (LMIS) for identifying skill shortages, training needs and available employment opportunities. This would facilitate greater synchronisation with portals like National Career Service to address skill shortages and meet the demand for labour in different sectors.
Synergy between different Sectors of the Economy
Employment creation is not restricted to one sector or policy. It covers various sectors and is impacted by various polices. In India, employment promotion is identified as one of the important milestones of various programmes. The National Employment Policy will ensure coordination and coherence across policy initiatives and programmes in different sectors.
Education and Skill Development
Educational and skill policies are increasingly seen by governments across the world as integral parts of broad economic strategies to develop economies and promote employment opportunities appropriate to changing needs of the economy. Skill-mismatch, formal skill training and re-training is seen as a significant issue for employability. The advent of automation, the growing importance of digital ecosystems and independent work, are challenging labour markets around the world while also creating new and better opportunities. The National Employment Policy will ensure that the education, training and skill development system is aligned with the changing requirements of the labour market. The contents of the NEP would stress on measures to ensure greater participation of the private sector in skill development and wider use of the apprenticeship programmes by all enterprises.
Improving Women’s Participation in the Economy
With just 27.4 percent women as compared to 75.5 percent men in 2015-16, the numbers of women in the workforce remain strikingly low compared to other developing countries. No single policy intervention will address the full range of constraints they face. The content of the NEP, in line with SDG 5 on Gender Equality, will focus on developing women’s human capital and capabilities and investing in their ability to adapt to changing labour markets; providing support for their care responsibilities; establishing gender-sensitive labour market regulations; and enhancing their voice and capacity for collective action.
Employment & Income in Agriculture
Improving livelihood opportunities and income of those engaged in agriculture is extremely important and would have an impact on the effort to end poverty in all its forms (SDG 1) and for reducing inequality (SDG 10) The contents of the NEP would incorporate new and innovative ways to get over the problem of land fragmentation, make farmers a participant in higher value addition and skilling rural youth in new technologies that can be incorporated in agriculture and agro-based industries.
Micro & Small Enterprise and Entrepreneurship development
The Micro, Small and Medium Enterprises (MSMEs) are the largest generator of employment. However, it is essential that they have access to training, incubator support to develop and execute their ideas and credit to finance their ventures. The contents of the NEP would include measures for creating awareness among these units to leverage the facilities offered to them by and the government and simplifying processes through which they can avail these facilities.
Targeted Programmes for Employment Generation
Targeted Programmes for employment generation, particularly those that take the form of an Employment Guarantee Scheme create a role for the government in the provision of employment to all those willing and able to work, should the labour market not offer such employment. The National Rural Employment Guarantee Scheme in India has already achieved a significant breakthrough in providing a certain level of employment security, particularly to informal workers and strengthening public works. Efforts in the future, guided by the National Employment Policy, need to be aimed at ensuring that the rural unemployed find adequate employment on a more sustainable basis and there are increased opportunities for women and other socially disadvantaged groups.
Employment Opportunities for the Vulnerable Section
The issue of promoting employment opportunities for minorities, SC/ST, the differently abled and women within these categories, assumes greater importance given the relative disadvantages they may have experienced. The NEP would provide the much needed focus on equal access to employment opportunities for marginalised sections.
Employment and Labour standards
Although the formal sector is largely protected by labour legislation and standards, it is important that policy initiatives are also focussed on improving incomes, working conditions, and promoting occupational health and safety for those engaged in the informal sector. The NEP would laydown strategies to incorporate the informal sector under the fold of labour legislation, social security and international standards.
The NEP would facilitate to establish an effective national coordinating and monitoring mechanism involving both state and civil society organisations to enhance employment promotion and creation.
While seeking to improve the overall enabling environment for accelerated economic growth and employment promotion, the formulation of a National Employment Policy would thus provide the roadmap for achieving sustainable economic growth while strengthening social cohesion and equity in the employment and livelihoods landscape.
*Ms. Sunita Sanghi is Senior Adviser, Dr. Sakshi Khurana is Young Professional with NITI Aayog. We acknowledge the contribution of Ms. Kashish Hashim, intern, Social Sector I, NITI Aayog. Views expressed are personal.