21 Feb 2019
From an economic perspective, this is indeed India’s moment. India was the fastest growing major economy in 2018 and is expected to retain its numero uno position even in 2019. According to the IMF, the GDP print is estimated to rise to 7.3 per cent in 2018 and is likely to strengthen further to 7.5 per cent in 2019. The question is whether the uptick in growth would be accompanied by a commensurate rise in employment generation. This question assumes significance since half the population of our country is under 25 years, and two thirds are less than 35 years. Going forward, by 2027, India is likely to have the world’s largest workforce, with a billion people between 15 and 64 years. Clearly, the creation of gainful employment opportunities for this workforce need urgent consideration in order to harness India’s promised demographic dividend.
In this context, the Economic Survey 2018 alludes to a significant rise in gainful employment in the country over the past few years. Citing EPFO payroll data, the Survey mentions that ‘India’s formal sector non-farm payroll is substantially greater than currently believed’. The reforms agenda of the government has led to the spawning of employment opportunities in diverse sectors such as tourism, manufacturing and services.
Yet, there are a number of challenges which are waiting to be addressed. A key concern relates to the employability of the workforce. A flexible policy regime and decentralised approach especially focused on the labour market as well as education and skills are very much needed. Equally pertinent is to use accurate employment data for capturing the increase in employment opportunities in the country and developing effective policy interventions. No reliable and dependable data sources are available which would provide a comprehensive picture of the employment scenario in the country. It is to be noted that though India has taken a big leap towards payroll reporting by releasing data from EPFO, ESIC and NPS, there are issues about the quality and measurement of data. The numbers are frequently revised and the classification of EPFO job data has left a lot be desired. Moreover, there is also the need for using the big data for counting informal jobs in India as it is critical to also look at the portion of population outside the scope of social security.
Host of new age industries have come up on the horizon which have improved the livelihoods of the people without necessarily translating into a concomitant pick up in employment as they are not getting captured in the formal payroll data. Efforts must be directed towards greater job formalization, including increased social security coverage to bring such employees into the formal jobs net.