In the past, most policy documents for conceiving a National Employment Policy (NEP), by and large, have been suggestive in nature.
There is an urgent need for a comprehensive NEP based on responsive real-time data analysis, integrating sectors that will help emerge sectoral employment policies and programmes amid the COVID-19 pandemic.
Such a policy document will effectively help formulate appropriate employment strategies which ensure decent work, empowerment and sustainability towards the vision of “New India” and “AtmaNirbhar Bharat”.
According to the International Labour Organization (ILO), about 63 countries across the globe have prepared a National Development Framework or National Employment Policy (NEP) to decide the roadmap for employment generation, mainly after the global financial crisis in 2008.
There is evidence that other countries are also moving away from tackling employment issues solely through the use of active labour market policies such as direct job creation and providing subsidies to generate employment.
They are moving towards development and adopting comprehensive national employment policies bringing together various sectoral measures, programmes and institutions that influence the dynamic demand and supply of labour and the functioning of labour market responding to the short, medium and long-term prospects and priorities.
As the Indian economy grows, the standard of living of its labour force, estimated to be around 500 million, would increase. This labour force is part of the global supply value chain and acquires a greater role because there is a phenomenon of ‘race to the bottom’ in terms of costs.
China’s experiences show that their wages have been increasing in recent years which is giving India an edge. When we talk of India, these dynamics and international benchmarks, we need to come out with a white paper vis-à-vis other competitive countries.
We need a deeper analysis of why India and the promises of New India has unparalleled, effective and decisive leadership, which is one of the best in the world at present.
The proposal to bring the NEP was introduced in 2008. During the tenure of the United Progressive Alliance (UPA)-1, an inter-ministerial group had examined the proposal but nothing concrete had emerged from it.
During UPA-2, the then Minister of Labour and Employment, Shri Mallikarjun Kharge, informed in reply to a question in the Rajya Sabha (8 December, 2010) that the formulation of the National Employment Policy was under consideration by the Government.
Moreover, the then minister also informed about the process of the formulation of NEP in his address at the 99th Session of the International Labour Conference at Geneva (ILO General Assembly was attended by 170 countries of the world, June 2010).
In 2016, the idea of the NEP took shape at the first meeting of the BRICS employment working group, after which the National Democratic Alliance (NDA) government started to work on it.
Since then, the government, policymakers, industry bodies, media and other stakeholders are continuously debating and suggesting about the need for a comprehensive NEP document, especially on the occasion of subsequent union budget announcements.
Employment generation has been one of the most important priorities and principal concerns of planning in India since the beginning.
During the fourth five-year plan (1969-74) and the early years of the fifth five-year plan (1974-79), as many as fourteen employment-oriented schemes were initiated. In every plan document, clearly, employment has been overriding priorities throughout plan periods.
One of the main objectives of the recent five-year plan i.e. twelfth five-year plan (2012-17) was the generation of decent and productive employment in the non-agricultural sector.
The primary interest is the transition from informal employment in the unorganised sector towards formal employment in the non-agricultural organised sector.
Over a period of time, in India, the nature of employment generation has changed and is creating new challenges as well as opportunities.
The question on why India needs a NEP has many explanations as there are serious concerns on employment in the country today, which are different than the earlier decades with many new emerging developments.
National policies such as National Youth Policy, National Education Policy, National Health Policy, which are dynamic, are already in place and institutionalised to guide for short, medium and long-term vision for education and health.
However, Independent India in its over 70 years of existence is yet to have its National Employment Policy.
The country is currently undergoing a dual challenge of employment creation. One set of people is the unemployed labour force (highest in the last 45 years, 6.1 per cent in 2017–18) and another set is around 10 million new entrants in the labour force every year.
Other important issues are jobless growth, structural transformation, under-employment, informal employment, skilled workforce, high levels of educational enrolment and aspiration of youth, sectoral issues, decent jobs and so on.
In addition, female participation in employment is not only low but also declining since the 2000s.
The emerging new technologies such as high-end information and communication technology (ICT), internet, industry 4.0 technologies, automation and task-based jobs such as gig jobs are adding new dimensions to the future of work.
The adoption of these technologies will increase in the future. In the process, many people will also lose their jobs in traditional sectors who are involved in routine tasks and at the same time many new sectoral and technology-based jobs will also be created with newer skills.
So, this is a great opportunity for the Indian youth to tap new emerging opportunities by learning new skill-sets. In the past, we have taken the skill advantage in the information technology sector worldwide.
The achievement of the government in using ICT for development is immense, such as JAM Trinity, direct benefit transfers, unemployment exchange and allowance, GSTN, EPFO, ESIC, etc., which is leading to more formalisation of the labour market.
India’s labour market scenario is facing multi-faceted, multi-sectoral challenges and is at risk of social exclusion. For ease of doing business and ease of living, NEP is important.
This is important to capture the sector-wise and region-wise labour market dynamics and facilitate registries for the manufacturing sector, MCA, informal sector, unemployment exchange, unemployment allowances, appropriation of jobs, etc.
In addition to online MIS and Dashboard for regular monitoring and evaluation of employment outcomes, every department should provide the annual target and achievement every year.
Continuous feedback through M&E exercise is important. Usage of Information from multiple dynamic sources, sectoral and administrative data and harnessing from insights and similar survey data for demand-side information and periodic reporting of various important facets.
Coordination is crucial and needs to be detailed out. There is a need for inter-ministerial and inter-departmental coordination and cooperation for providing a strong Decision Support System for various sectors and industries and proper channelization of resources.
The NEP would lay out such platforms and processes for matters related to labour and employment in an integrated and harmonious manner.
In this context, a policy document with practical vision and comprehensive macroeconomic and sectoral policy roadmap for achieving a country’s employment goal is urgently required.
The Indian economy had slowed down before COVID-19 outbreak, but the ongoing pandemic has pushed it further into a recession. As per data from the CMIE, the employment rate has touched as high as 23.5% in the two months of the lockdown in April and May 2020.
Apart from this, CMIE has also estimated that 27 million youths in the age-group of 20–30 years have lost their jobs in April 2020 because of the lockdown. This will have a great impact on livelihood and jobs in the future.
Further, these problems differ across regions and sectors of employment. Therefore, recognising these challenges and putting in place appropriate policy responses to tackle them is of utmost priority.
As multiple forces ranging from technological advances to climate change to demographic changes transform the world of work, the absence of decisive policy action will further disrupt livelihoods and exacerbate inequalities.
The government needs to take appropriate steps urgently to assess the current employment situation in the country, including the macroeconomic environment, demographic context and sectoral challenges in employment generation, following which it will set targets and monitor them.
The current COVID-19 pandemic has posed extreme challenges across the world with huge losses of jobs and livelihood. The targeting and assisting of the labour force are important because in times of crisis like COVID-19 the focus has been on ‘Gareeb Kalyan’.
Since workers are also human beings and for their social protection numerous programs are already in place, NEP would be important to understand the dynamics of benefits of workers, employers and governments.
Now, the government is again looking forward to a comprehensive NEP at the national level to provide a future roadmap for encouraging the employment generation in the post-COVID-19 period.
The labour minister has asked the officials to look at the employment policy while keeping in mind the challenges and disruptions that have occurred because of the COVID-19 pandemic.
India has ample intellectual and practical knowledge to formulate such a policy that takes into consideration gender, caste and ecological concerns.
A lack of such a policy could result in a warped economic transformation resulting in avoidable stress on employment, social and gender harmony.
It’s very important to have an inclusive policy which caters to the challenges and needs of the marginalised; including women and Divyang among others.
The aspirational districts and the priority sectors needing more attention must be identified. This will go a long way in achieving the principles of “Sabka Sath, Sabka Vikas, Sabka Vishwas”.
A NEP will have an immense role in advisory and roadmaps for clarity.
Moral suasion and appropriate signalling are important to ensure consistency, predictability and stability and a strong future outlook for ensuring confidence at par with India competitors. This would detail the direction of the economy holistically.
New investment areas, entrepreneurship and innovation initiatives, start-up ecosystems, gig economy, conventional sectors, studies and projects would identify the new and emerging focus areas for continuous feedback into the system.
Research and Development is the core of the entire NEP.
The policies, schemes of the relevant ministries and committees need to be streamlined and would be important to be studied to collect evidence and provide essential inputs for policymaking since it’s an ongoing process.
It will also be crucial for implementation, monitoring and evaluation. This is important for Digital India objectives and outcome-based decision making as per the MoSPI and NITI Aayog’s recent efforts for data and planning.
For this, the maintenance of a real-time database and repository and monitoring of employment status of the labour force is important. It would require enormous efforts in the beginning but would yield more than proportionate results in the immediate future.
There are many schemes for employers and workers such as EPFO, ESIC, PMJDY, MSME, Startups, BOCW, PMSYM, PMSBY, SHGs, etc.
In times of disasters and state and national emergencies, the NEP would provide a backbone and architecture to complement the efforts of the government and maximise relief to the affected families and enterprises.
This would minimise economic losses and optimise the use of limited resources. This would complement the PMs vision of New India and achieve the $5 trillion economy, having a special emphasis on Shramik Samman Evam Sashaktikaran (Labour Respect and Empowerment).
The NEP can provide a 360° framework, having inclusive and sustainable planning and enabling environmental and holistic impactful approach towards decent employment and vision of New India.
The Sustainable Development Goal (SDG) Goal 8 states: promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.
The consultation paper for draft National Urban Policy Framework 2018 is an important document template for the NEP to start taking shape.
In the past, most policy documents for conceiving a NEP, by and large, have been suggestive. There is an urgent need for a comprehensive NEP based on responsive real-time data analysis integrating sectors that will help emerge sectoral employment policies and programmes amid the COVID-19 pandemic.
The preparation of the NEP warrants a broad-based national consensus among various stakeholders. This can be ensured through a consultative process by taking various stakeholders views and the constituents’ demands to be taken into consideration during the policy formulation process.
The most important part of the policy is to formulate a link between the policy options and budgetary allocation and/or financial mechanism considering the convergence among various departments or sectors.
Further, an institutional framework detailing the roles and responsibilities for the implementation and monitoring of progress should also be part of the policy document.
Such a policy document will effectively help to formulate appropriate employment strategies which ensure decent work, empowerment and sustainability towards an Atma Nirbhar Bharat and contribute significantly towards achieving the goals of the 2030 Agenda for Sustainable Development.
Prof Balwant Singh Mehta, Research Director (H) at Impact and Policy Research Institute (IMPRI), New Delhi and Senior Fellow at Institute for Human Development, Delhi.
Dr Arjun Kumar, Director, Impact and Policy Research Institute (IMPRI), New Delhi and China-India Visiting Scholar Fellow, Ashoka University.