According to the TeamLease study, India continues to be one of the most resilient economies that have registered nearly 10 per cent income growth in the last five years. The country has surely gained from its growing young population (demographic dividend) that has the potential to quadruple our GDP and catapult us into the developed economies league over the next decade. This can be achieved if the billion people can be transformed into a productive workforce.
Even as the financial crisis continued to chain react into unexpected geographies, India added an estimated 1.14 million jobs in 2010 – about as many jobs America added in the last 10 years. Hiring sentiments have risen steadily as businesses have put increasing faith in a resilient economy. Strangely, however, the net employment expansion over the past 5 years is only a million jobs – the differential of 22 million job additions among the male population and shrinkage of 21 million jobs among the female population.
Following this startling finding by NSSO and the initial dismissive reactions by policy makers, the cutback is being interpreted as increased incidence of a back-to-school phenomenon among the younger age groups and especially among the female population. That an otherwise under-educated, under-employable workforce has sought to revert to formal education mode and would reenter the labour market as better qualified supply is good news. The bad news though, is labour policy makers are not able to explain an incremental, 1 million, job creation in as many as 5 years.
A near-10% income growth – which makes India one of the fastest growing, and one of the more resilient, economies – fails to bring down the number of poor from a stagnant 300 million.
A staggering 83 million (estimated) in the labour force are either unemployable or inadequately skilled.
This number would increment by about 13 million every year unless the recent skill development initiatives are truly effective in deflating it.
4.91 lac jobs were lost since 2008 in the global meltdown. At a 6% rate of job loss, the unorganised sector lost far more jobs compared with the 0.3% job loss rate in the organised sector. Sectors such as garment exports that employ a blue collar workforce numbering millions bore the brunt of this loss.
India needs to invest an approximate 10% of its GDP back into equipping its workforce to actually reap the famed Demographic Dividend and also significantly reform the education-vocation system.
While nearly 50 million unemployed people are to be immediately put to work there is a dire need to stop looking in the rear view mirror and formulate policies based on current and forecasted labour demand, in the medium term. Feeding the services sector with graduate and post-graduate level, employable talent is an imperative.