The Economic Survey 2012-13 paints a rosy picture for India in terms of employment statistics - pegging the unemployment rate at just about 6.6 per cent in 2009-10, down from 8.2 per cent in 2004-05.
Given the need for absorbing the large, increasing population of youth, these figures are optimistic.
The Survey, tabled in the Lok Sabha on Wednesday by Finance Minister P. Chidambaram, points out that in one year, till June 2012, about seven lakh jobs were added to the economy.
However, with about 128 lakh people joining the workforce every year, both these figures appear to unconvincing.
“The last decade, 1999-2000 to 2009-10, witnessed an employment growth of 1.6 per cent per annum,” the Survey says, adding that the figures moderated in the second half of the decade due to labour force participation rate (LFPR) dipping from 430 per thousand people in 2004-05 to 400 per thousand in 2009-10. LFPR reflects the number of people willing to work. The Survey says that the dip in unemployment as also the conservative growth in employment in 2009-10 could be due to an increasing proportion of the young population opting for education.
However, some economists take this with a pinch of salt.
Dr Himanshu, Assistant Professor in Economics, Centre for Study of Regional Development at the Jawaharlal Nehru University, says the unemployment data may not be the best indicator in Indian economy given the fact that about 90 per cent of the workforce is employed in the informal sector. He said that it is good that many young people are trying to acquire more education and skills but the reverse scenario, where people turn to skills development due to continued unemployment despite being eligible for work, could also be true.
The Survey has, for the first time, included a chapter on “Seizing the Demographic Dividend”, given the importance of employing the youth productively.
It forecasts that in the 2011-30 period nearly half the additions to the workforce will be in the relatively young age group of 30-49, even as the average age of the working population in most countries across the world rises.
The Survey has also called for focus on productive jobs and not just adding to the number of jobs.
Himanshu also reiterated this. “The real drivers of growth have to change. Companies need to create jobs that are decent and give people a better quality of life,” he said, adding that the key employment generators — services and manufacturing — need to step up in this regard.
“Lower quality of employment is not good for the economy or for inclusive growth.”
The Survey has raised concerns over job creation slowing down in the services sector.
The report has emphasised on the need for apprenticeships (for skilling on job), skilling temporary workers and encouraging formal employment and balancing quality and quantity issues to address the skills gap in the job market.