Unemployment is still a major problem
The data released by the government on a day when ministers of the
Narendra Modi cabinet took charge showed 7.8% of all employable urban youth
being jobless, while the percentage for the rural was 5.3 %. The joblessness
among males on all-India basis was 6.2%, while it was 5.7% in case of females.It
also showed that the unemployment rate for males was higher at 7.1% in cities
compared to 5.8% in rural areas. Similarly, the joblessness for women was also
higher in urban areas at 10.8% compared to 3.8% in rural areas.
It is important to note that with the rise in education levels in the
economy and rise in household income levels, the aspiration levels of educated
youth have also risen. Unemployment is higher among general category despite
their merit. Wrong selection process, of kicking out deserving meritorious to
facilitate quota rules should be assessed in the interest of consumers. This is
creation of artificial scarcity of intelligentsia.
The unemployment issue has to be addressed by the Government and
necessary steps need to be taken on war footing as like steps are being taken
for farmers, traders. Government cannot afford to ignore the unemployment
problem.
Unemployment and under-employment have been a long-standing problem in
the Indian economy. According to a 2013 report by Pravin Sinha, the Indian
labor force has been officially classified by the Indian government into three
categories:
Rural sector, which includes the farm labor, Urban formal sector, which
includes factory and service industry labor with periodic salaries and coverage
per Indian labor laws and Urban informal sector, which includes self-employment
and casual wage workers.
The rural and informal sectors of the Indian labor market accounted for
93% of the employment in 2011, and these jobs were not covered by the then
existing Indian labor laws. According to the 2010 World Bank report,
"low-paying, relatively unproductive, informal sector jobs continue to
dominate the [Indian] labor market." "The informal sector dominates
India’s labour markets and will continue to do so in the medium term",
states the World Bank, and even if the definition of the "formal sector is
stretched to include all regular and salaried workers, some 335 million workers
were employed in the informal sector in 2004–5".
What are the causes of Unemployment in India? According to Alakh Sharma,
the causes of high unemployment and under-employment in India is a subject of
intense debate among scholars. A group of scholars state that it is a
consequence of "restrictive labor laws that create inflexibility in the
labor market", while organized labor unions and another group of scholars
contest this proposed rationale. India has about 250 labor regulations at
central and state levels, and global manufacturing companies find the Indian
labor laws to be excessively complex and restrictive compared to China and
other economies that encourage manufacturing jobs, according to the economist
Pravakar Sahoo. According to Sharma, the Indian labor laws are "so
numerous, complex and even ambiguous" that they prevent a pro-employment
economic environment and smooth industrial relations. India needs "labour
market reforms that address the needs of both employers and workers", and
it should rewrite its labor laws that protects its workers, provides social
security for workers between jobs, and makes compliance easier for the
industry. According to The Economist the Indian labor laws are inflexible and
restrictive, and this in combination with its poor infrastructure is a cause of
its unemployment situation.
Steps taken by the Government are not sufficient. Government did come up
with solutions like Mahatma Gandhi National Rural Employment Guarantee Act 2005,
Steps taken on Disguised Unemployment and National Career Service Scheme. But
still more is left to be done in this area.
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