The Hindu Editorial Analysis- 2nd July 2024 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

Determinants of Unemployment

Relationship Between Unemployment Rates and Self-Employment

• Self-employment: States with a high proportion of self-employed individuals tend to have lower unemployment rates.
• Informal Employment: A significant portion of self-employment in India is informal, especially in agriculture and rural areas, which can absorb many job-seekers.
• Urban vs. Rural: Urbanized states have smaller agrarian sectors, limiting the scope for informal job absorption compared to rural areas where agriculture can serve as a labor reserve.

Causes of Unemployment in India

• Demographic Challenges: Population growth and age structure impact job availability.
• Economic Differences: Rural-urban disparities affect job creation and availability.
• Job Creation: Limited new job opportunities contribute to unemployment.
• Youth Unemployment: High unemployment rates among young people.
• Gender Divide: Economic disparities between men and women.
• Informal Sector: Predominance of informal employment with limited job security.
• Skill Mismatch: Disconnect between job requirements and worker skills.

Concerns Associated with High Unemployment in India

• Poor Employment Conditions: Despite improvements in labor force participation and employment rates, job quality remains low.
• Challenges for Youth and Women: Young graduates and women face significant unemployment, with many women moving into self-employment or unpaid family work.
• Gig Workers: Gig and platform workers face job insecurity, irregular wages, and uncertain employment status.
• Impact of AI: Artificial intelligence may disrupt the job market, especially in outsourcing.
• Regional Disparities: Significant differences in employment conditions across states.
• Social Inequalities: Scheduled Castes and Scheduled Tribes continue to face barriers to better jobs.
• High Population: Increased competition for limited job opportunities.

Indicators Used in Employment Condition Index

1. Percentage of workers in regular formal work.
2. Percentage of casual laborers.
3. Percentage of self-employed workers below the poverty line.
4. Work participation rate.
5. Average monthly earnings of casual laborers.
6. Unemployment rate of secondary and above-educated youth.
7. Youth not in employment, education, or training.

Way Forward to Increase Employment Opportunities

• Promote Job Creation: Focus on creating new jobs, particularly in productive sectors.
• Improve Employment Quality: Enhance job quality through better labor policies.
• Address Labor Market Inequalities: Tackle disparities in the job market.
• Strengthen Skills and Policies: Improve skills development and active labor market policies (ALMPs).
• Bridge Knowledge Deficits: Improve understanding of labor market patterns and youth employment.

Supporting Enterprises and Encouraging Entrepreneurship

• Support to Enterprises: Provide tools like digitalization and AI to micro, small, and medium-sized enterprises.
• Collaborative Approach: Enhance collaboration between state governments, private sector, and other stakeholders.
• Digitalization and Technology: Promote digital literacy and support digital platforms for gig work.
• Education and Industry Collaboration: Align educational curricula with industry needs, and promote internships and vocational training.
• Skill Development and Vocational Training: Invest in training programs to enhance employability.
• Encourage Startups: Support entrepreneurship through incubation centers, financial incentives, and simplified regulatory procedures.
• Policy Interventions: Implement economic policies to boost non-farm employment, particularly in manufacturing.
• Inclusive Urban Policy: Develop policies to address the needs of migrants, women, and young people in urban areas.
• National Employment Policy (NEP): Fast-track policies to formalize the workforce and ensure job and social security.

Government Initiatives for Employment

• Support for Marginalized Individuals for Livelihood and Enterprise (SMILE)
• PM-DAKSH (Pradhan Mantri Dakshta Aur Kushalta Sampann Hitgrahi)
• Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)
• Pradhan Mantri Kaushal Vikas Yojana (PMKVY)
• Start Up India Scheme
• Rozgar Mela
• Other Measures: Skill development initiatives, National Education Policy (NEP), employer contribution payments for new employees, Atmanirbhar Bharat Rozgar Yojana, and new tax regimes for wage deductions.

These initiatives aim to improve employment opportunities, address skill mismatches, support entrepreneurship, and enhance the overall job market in India.