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How India is crafting a national employment policy

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A proposed government committee to draft a national employment policy is expected to come out with a roadmap to increase employment opportunities. Mint explains how the policy could work and its potential impact on the economy.

A proposed government committee to draft a national employment policy is expected to come out with a roadmap to increase employment opportunities. Mint explains how the policy could work and its potential impact on the economy.

What is the panel’s objective?

With renewed focus on employ-ment following the outbreak of the coronavirus pandemic, the Centre has proposed a committee to draft guidelines for a national employment policy. Data for current weekly employment status in urban areas shows that unemployment rate (UR), which peaked at 20.8% in April-June 2020, fell to 10.3% in October-December 2020. The panel will work to create a roadmap to generate employment opportunities in India. Work has begun to identify its members, including representatives from the labour ministry, other ministries, academia, and industry experts.

What could be the focus of the policy?

The panel might suggest sector-wise targets for jobs. Given the expected boost for employment from the recent production-linked incentive (PLI) schemes and the increased demand for gig workers, its aim would be to facilitate the creation of an enabling environment for startups and new industries to generate jobs, improve the skill sets of workers and make them employment-ready. A greater focus on female workforce participation is expected. The panel might also announce incentives for job creation. The recommendations may be based on data received from the ongoing labour surveys.

What is the current unemployment scenario?

According to the Centre for Monitoring Indian Economy (CMIE), India’s unemployment rate was 7.75% in October 2021, against 11.84% and 9.17% in May and June 2021. It is worth stating that these numbers need to be considered with caution as CMIE estimates are based on a small sample size of 44,600 households per month spread across the country.

What could be a balanced approach?

The government should think in terms of a ‘national economic policy’, rather than looking at one particular by-product i.e. employ-ment generation. Employment generation ratio is bound to differ from sector to sector. The Quarterly Employment Survey (QES) for April-June 2021 showed that manufacturing accounted for 41% employment, followed by education at 22%, health at 8%, and trade and IT/ ITeS at 7%. It is important that national priorities be decided on the basis of aspirations of the society.

Who should the nodal agency be?

With the Centre keen to attract domestic and foreign investors into employment-intensive sectors and make the country a global manufacturing hub, the aim is to lay out a sector-wise strategy. The nodal agency could be a separate ministry for economic affairs. It could also be implemented under the ministry of finance or the PMO. The task of drafting the policy should not be left only to the ministry of labour and employment.

Jagadish Shettigar and Pooja Misra are faculty members at BIMTECH.

 

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