Job Creation: A Big Challenge

In Context

• With the nationwide unemployment rate increasing, creating jobs will remain a key challenge for the government.

Status of job creation & recruitments in India 

• Slowdown:
  • While IT/ITeS companies and startups predominantly lead the slowdown in job creation, most other industries are going slow in their recruitment plans. 
  • According to a recent report, about 2.25 lakh active jobs are open in the market as per hiring firms, about 1 lakh fewer than a year earlier.
    • Specialised hiring firms claim that the white-collar workforce has taken a severe beating.
• No job security:
  • The concept of job security has lost its relevance. 
  • In recent months, tech giants such as Google, Microsoft, IBM, Meta, Amazon, Cognizant, and big startups such as Byju’s and Ola have fired thousands of employees in India.
• Demand for skills & IT professionals:
  • In some sectors, tech talent continues to be in demand as non-tech industries undergo a digital transformation. 
  • Several companies in banking and non-banking, hospitality, automobiles, manufacturing, pharmaceuticals, and education are seeking skilled IT talent to drive their digital progress. 
  • On the flip side, there is still some hope for blue- and grey-collared employees, according to hiring firms.

Reasons & challenges

• Reasons are varied: 
  • Cost-cutting, tough macroeconomic conditions, reduced revenue visibility, and a freeze on fresh hirings after a few quarters of over-hiring. 
  • In several cases, the companies have blamed it on the ‘underperformance’ of the staff. 
• AI & possible job loss:
  • The other culprits are artificial intelligence and data analytics.
  • According to experts, AI would take over 7,800 human jobs in the next five years as an eye-opener. 
    • AI could replace some back-office functions and human resources. 
  • Tech giants are realigning their human resources and looking for people with skill sets in areas like AI and machine learning to replace the existing staff who do not possess the required skills for futuristic tech services and tools.
• Job opportunity & qualification mismatch:
  • India presents a paradox of skill shortages while being labour surplus.
    • Trucks are idle because of the shortage of drivers. The steel industry needs more metallurgists. 
    • The healthcare sector is short of nurses and technicians. 
    • The construction sector needs civil engineers, hi-tech welders, bricklayers, and so on. 
• Sector-specific mismatch:
  • India’s economic growth has been largely services led, with a small pool of skills at the upper end, given a glaring failure in mass education, while capital intensity has increased in manufacturing overall in spite of our labour abundance. 
• Low participation of women:
  • One reason is essentially about the working conditions — such as law and order, efficient public transportation, violence against women, societal norms etc — being far from conducive for women to seek work.
    • A lot of women in India are exclusively involved within their own homes (caring for their family) of their own volition. 
  • Lastly, it is also a question of adequate job opportunities for women.

Government initiatives

• National Career Service (NCS) Project:
  • Project for transformation of the National Employment Service to provide a variety of career related services like job matching, career counselling, vocational guidance, information on skill development courses, apprenticeship, internships etc.
  • It is under the aegis of Ministry of Labour and Employment.
• Pt. DeenDayal Upadhyaya Grameen Kaushlya Yojana (DDU-GKY):
  • DDU-GKY is a part of the National Rural Livelihood Mission (NRLM), tasked with the dual objectives of adding diversity to the incomes of rural poor families and cater to the career aspirations of rural youth.
• PM- SVANidhi Scheme:
  • Prime Minister Street Vendor’s AtmaNirbhar Nidhi (PM SVANidhi) Scheme aims to provide collateral free working capital loan to Street Vendors, vending in urban areas, to resume their businesses which were adversely affected due to COVID-1 induced lock-down. 
• Pradhan Mantri Kaushal Vikas Yojana (PMKVY):
  • Pradhan Mantri Kaushal Vikas Yojana (PMKVY) is the flagship scheme of the Ministry of Skill Development & Entrepreneurship (MSDE) implemented by National Skill Development Corporation.
• Rural Self-Employment and Training Institutes (RSETIs):
  • RSETIs are Rural Self Employment Training Institutes,  an initiative of the Ministry of Rural Development (MoRD) to have dedicated infrastructure in each district of the country to impart training and skill upgradation of rural youth geared towards entrepreneurship development. 
  • RSETIs are managed by banks with active cooperation from the Government of India and State Governments.

Suggestions & Way ahead 

• Employment and unemployment in India have always been at the centre of discussion for the government and intellectuals alike. 
• Employment in itself comes with some of its own issues, 
  • like lack of decent working conditions, exploitation of employees, absence of decent remuneration etc.
• What can be done?
  • Quality of education should be the cornerstone for the government and people alike. 
  • A favourable policy environment for businesses to start and grow with ease, and a bigger footprint in international markets will help.
  • It is time we take the Skill development initiative undertaken by the government to be implemented effectively. 
  • Employment generation, coupled with improving employability should be the priority of the government.