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General elections are around the corner, and the Union Budget that Finance Minister Arun Jaitley will present on February 1 is the NDA government’s last full-fledged Budget of its current term.
That being the case, one can expect a lot of focus on the government’s proposals for skill development and employment generation, one of the key promises in its 2014 election manifesto.
Though clear-cut policies that would have an immediate impact on job creation are unlikely, jobs are likely to be a top priority after the disruptions caused by demonetisation and GST rollout.
New programmes
The government is working on a National Employment Policy (NEP) and a universal social security scheme, which may be announced in the Budget, along with higher allocation for the MUDRA scheme for financing entrepreneurship.
Additionally, a renewed focus on skill development and vocational training may also be seen in the Budget.
The NEP is expected to have a sector-wise focus, especially on labour-intensive sectors such as textiles and handloom, and other small and medium enterprises.
It will likely provide them with incentives for formal employment.
“Creating jobs is India’s central challenge…India needs to generate jobs that are formal and productive, provide bang-for-buck in terms of jobs created relative to investment, have the potential for broader social transformationand generate exports and growth,” the Annual Employment-Unemployment Survey said, noting that the apparel, leather and footwear industries can provide a viable solution.
Labour code
Similarly, the Labour Code on Social Security, which is still under discussion, could also feature in the Budget. It aims to provide social security coverage to all workers, especially those in the informal sector.
“Many of the policies that are now taking shape will have a huge impact on the job market over the next few years.
“As private investment recovers, a lot more jobs will be created,” noted another official, adding that this is where a skilled workforce will also come into play.
With 484 districts covered by Pradhan Mantri Kaushal Kendras for skill development, the government is now working on the Indian Institute of Skills to provide advanced courses such as energy efficient construction, industrial electronics and automation.
While five such institutes are being planned, the construction of the first one, in collaboration with the Tata Group, will start in Mumbai soon.
Under the Pradhan Mantri Kaushal Vikas Yojana, about 40.5 lakh candidates received training by mid-December. In 2017, as many as 11 lakh candidates were trained under the scheme, while another 3.7 lakh people were assessed and certified under the scheme of Recognition of Prior Learning. Similarly, 12.12 lakh candidates passed out from Industrial Training Institutes.
“Out of 2.5 crore candidates who have been skilled under Ministry of Skill Development and Entrepreneurship (MSDE) programmes alone, more than one crore have been trained in 2017,” said an official release. A lack of sufficient wage employment has also been a key challenge for the MSDE, which has been training youth in vocational skills, though many have often not found jobs.
Lack of jobs
“We can only create an environment that is conducive to job creation and employment. The real jobs have to come from the private sector and that is not really happening,” noted a senior government official.
While the Centre has launched policies such as Make in India and Skill India, labour markets have been mostly subdued, with private investment remaining muted due to both global and domestic economic factors.
“The effort is to place candidates on successful completion of courses. Self-employment and entrepreneurship are also promoted as an alternative option amongst students,” noted an official.
The Annual Employment-Unemployment Survey, conducted by the Labour Bureau, pegged the unemployment rate at 5 per cent in 2015-16 from 4.9 per cent in 2013-14 and 4.7 per cent in 2012-13.
More recent data from the BSE-CMIE index estimates the country’s unemployment rate at 5.13 per cent for the week ending January 14. It, however, indicates that current unemployment rates (based on a 30-day moving average) is higher than a low of 3.06 per cent on August 3, 2016, but has gone down significantly from a high of 9.92 per cent on September 10, 2016.
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