There is an increased concern that the average growth of 7.5% posted in the last three years could not generate the kind of employment needed to absorb the surge in the workforce. According to the International Labour Organisation, the unemployment in India could scale up to 3.5% in 2018 and 2019 compared with 3.4% in 2016 and 2017.
The uptick in unemployment may be the result of transforming workspace decked with technology and automation. India is a young country with a median age of 27.9 years and 2 out of 3 Indians are below the age of 35. Half of the 1.2 billion are eligible to work whereas the job opportunities are limited.
About 54% of the total population is below 25 years and 62% is in the working age group of 15-59 years. The growth of employable people will rise in the next decade providing demographic advantage that may last till 2040. Hence, it is essential to divert the energy of the youth for growth and development by turning them into productive entrepreneurs.
Despite an increase in the number of institutions of higher education, India has only 8.15% of graduates. But even among the educated, most of the jobseekers are unskilled and not ‘industry-ready’ by the time they complete formal education. However, of the 600 million eligible to work, even those who have completed 10th standard are 50 million. So many of them do not have any formal education, leave alone their ability to navigate technology.
It is estimated that a million youth enter the job market every month. A recent joint study by SBI and IIM Bangalore indicates that job creation has been at the rate of 5,90,000 every month till November 2017. It estimates that going forward, based on the trends, seven million jobs could be created during FY18.
The data for the study was drawn from the pattern of enrolment with Employees Provident Fund Organisation (EPFO). Despite the limitations of the study, the uptick in employment pattern is encouraging but what is more important is enabling employability of youth entering the job market by aligning their skillsets to employing units.
With artificial intelligence tools forming part of office and factory space, absorbing unskilled labour in new generation entities poses a challenge. More than basic qualification, skillsets are important. Though the concepts of ‘on the job’ exposure and apprenticeship are gaining space, it does not percolate to lower rungs of jobseekers.
According to the India Skills Report 2017, the percentage of candidates employable showed a minor improvement from last year, rising to 40% from 33.12%. It only indicates that the remaining 60% of even educated people is not employable. While the government is keen to improve the skillsets with vocational training programmes, it is individual efforts that are needed to build core competencies to improve the employability quotient.
In order to make the workforce compatible to industry, in the final phase of formal education, the youth should be exposed to practical working orientation in coordination with commercial entities to help them take off in the corporate sector, factories and business entities from day one.
Skill India Mission
One of the avowed reasons for unemployment is the lack of preparedness of youth to be skilled and ‘job-ready’. Lack of knowledge and knowhow lowers productivity and many are not able to retain employment.
On the other hand, industry faces a severe shortage of well-trained, skilled workers. It is estimated that only 2.3% of the workforce in India could be exposed to any form of formal skill training as compared with 68% in the UK, 75% in Germany, 52% in USA, 80% in Japan and 96% in South Korea.
Launched in July 2015, the ‘Skill India’ campaign is intended to empower youth with skillsets to improve employability and productivity at workspace. A separate Ministry for Skill Development and Entrepreneurship has been set to provide policy thrust on skill building. Pradhan Mantri Kaushal Vikas Yojana (PMKVY) has been introduced to supplement efforts to reach out to youth.
Skill development initiative covers 40 key sectors aligned to industry standards well-recognised by prospective employers. The rigour of the training is aligned to the National Skill Qualification Framework so that they are seamlessly absorbed. According to the latest data, 10.4 million youth are trained under the Skill India scheme and 20 lakh under PMKVY. It is an effort in progress but educational institutes and other agencies will have to join to provide thrust.
New Employment Avenues
The Mahatma Gandhi National Rural Employment Guarantee scheme that provides for 100 days of employment in a year got an allocation of Rs 55,000 crore in the Budget. The newly-proposed infrastructure project ‘Bharatmala’ with a target to construct 50,000 km of roads and affordable housing for all by 2022 are being implemented in full swing. This will see creation of additional employment opportunities.
Swachh Bharat campaign and the mega health insurance scheme to cover 50 crore poor people can also create jobs. The ongoing employment-intensive investment project — Pradhan Mantri Gram Sadak Yojana (PMGSY) — is meant to repair and construct all-weather roads. It has so far built 4,500,00 km of roads connecting habitations in rural areas.
Despite such thrust to create employment opportunities, it is necessary to engineer a cultural shift among youth to adopt entrepreneurship to become employers rather than employees. Educational and vocational training institutes have to collaborate with institutes of higher learning such as IITs/IIMs/premier universities to transform youth to contribute more effectively to creating employment opportunities.
The attitudinal shift is necessary with lifetime job opportunities getting gradually substituted with tenure-based consultancy, outsourcing, limited term jobs on contract, project-based jobs with more hire and fire policies. In order to survive in the present technology-driven job market and innovative entrepreneurship, it is essential to learn the nuances of ‘on the job’ skills to navigate the emerging job market. Employment is open to able and competent job- seekers and lifetime jobs are waning fast.
(The author is Director, National Institute of Banking Studies and Corporate Management, Noida)