Too Many People Chasing Too Few Jobs - The Long Wait Gets on the Nerve
Despite clocking one of the highest economic growth in today’s global scenario, the dismal state of job creation, skill upgrade, social security and formalization of employment are among the most vexing of India’s strategic worries.
Are we creating jobless growth? Why are we unable to spur massive job creation like what China was able to do over the past nearly three decades?
The command economy rhetoric of the lost years of the pre-liberalisation phase is not the answer to our dilemma. Back in the days of chaotic PSU investments, toxic work culture, low productivity and sub-par competitiveness pushed India out of any reckoning on the global stage of trade, commerce and manufacturing.
We got on to the liberalisation bandwagon late, and that too hesitantly, out of compulsions and fear of possible sovereign debt-repayment default. The lack of preparedness and low commitment while laying out the liberalisation model and policies made our approach more half-hearted and tentative.
This was in stark contrast to the Chinese efforts, which were outcomes of a well-thought-out and deliberate plan for transformation. China focused on aggressive job creation, massive skilling and skill transition programs. The way the rural, largely agriculture-based and ill-trained workers in China’s hinterland were equipped and enabled to migrate to the factories and workshops spurred an unprecedented manufacturing revolution that the world took note of. Vietnam, Thailand and Malaysia also adopted and customized the Chinese model and built local manufacturing capacity and workforce skills upgrades to take advantage of the global outsourcing boom.
India’s bickering, back-biting political jingoism between the ruling and opposition groups has been legendary. Irrespective of whoever was in power and out of it, the outcome was the stalling of reforms, the rhetoric of populism and anti-investment narratives.
Of course, India did well in positioning itself as the IT skills nursery and becoming the preferred outsourcing partner for low and medium-level IT operations. The IT boom in India was led almost entirely by the private corporate sector and a bunch of spirited technocrats, mostly from the prestigious IITs were the key players who shaped the success stories. It was hardly a Governmental push and that was its success mantra.
With the onset of AI and smart technologies, routine IT skills are under threat. What the world now needs is more sophisticated development personnel for upgraded IT solutions. However, the human resources challenge at the macro level is much more complicated now.
We have not only to channel surplus agricultural manpower to more productive and diverse skill areas, but we must also retrain, upgrade and move thousands of low-skill IT workforce to alternative domains to take care of the mounting redundancies.
However, the problem is that high-end IT cannot create massive demand for jobs at a scale comparable to the manufacturing or logistics domains.
Jobs are the critical economic component for India to sustain and grow as well as to retain strategic advantage as a global business partner.
True, the manufacturing sector has gone past the humongous outsourcing or off-shoring phase and there is a global tendency towards retaining jobs locally even in the advanced economies.
When Donald Trump talks about Make-America-Great-Again (MAGA), he also means bringing off-shored jobs back and preferring local talent and companies over overseas ones.
With the help of automation and advanced chip-based interfaces, the Western world is trying to regain manufacturing competitiveness by controlling costs and boosting human capital quality and rewards.
In this context, what can India do to provide jobs for our workforce, especially at the entry and low levels?
Job Reform is a complex and multi-dimensional task for India. It would take time and needs a very resolute attempt over the medium term. But it is time to start.
Let us focus on the five critical areas of reform relating to jobs.
Firstly, we need to provide jobs of value and visible outcomes that provide satisfaction and motivation to the jobholders. It is important to increase the formalization of jobs. As of now, nearly four out of five jobs in the country are informal. Non-formal gig workers and agricultural workers (engaged in seasonal, part-time, overlapping, intermittent engagement) hardly have consistency, certainty, continuity or decent remuneration for their jobs. The retail sector is another area where formalization is low. Same with logistics and transportation. Moving these informal workers to more regular and meaningful roles would upgrade the employment scenario in the country.
Secondly, and allied with the first issue, is the lack of social security cover for workers. The informal workers are at a higher risk than their formalized counterparts of missing out on adequate and effective social security coverage. Though rudimentary coverage has started of late, this is still largely a work in progress.
Thirdly, we need to have a transparent, fair and strong corporate linkage to skill, certify, and provide internships to those passing out of schools, vocational institutes and colleges. Though the Federal Government has initiated this vital reform in the recent budget provisions, there is still a long way to go to reach anywhere near global best practices.
What I recommend is the integration and enlargement of CSR and apprenticeship tracks to be dovetailed into a seamless, comprehensive skills and jobs ecosystem.
Thirdly, the Agni Veer system is a good concept but hastily implemented in a half-baked manner. This needs to be revised and enhanced to cover larger numbers and to provide career paths to induction into military, para-military, civil defence, government and public sector jobs. Credit and preference can be given in corporate jobs as well. The objective should be to accommodate the top 80% of the passing out Agni veers in regular job streams.
Fourthly, Vocational training curriculum, accreditation and certification systems should be upgraded. Independence, capability and credibility of accreditation and certification systems should be enhanced, audited, and continuously monitored.
Fifthly, as part of the pursuit of social justice and to ensure the upward social mobility of the traditionally weaker sections of society, a special track for training, and employment of women, Tribals, scheduled castes and OBC candidates should be prescribed.
Unless job as a socially sensitive topic is brought as central to the policy framework, governance will remain imperfect and society’s inequities will continue.
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