In a webinar, organized by Center for Work and Welfare at IMPRI, Working People’s Charter and Counterview on Employment Scenario, Policy and AtmaNirbhar packages amid Pandemic: Impact, Challenges and the Way Forward, Dr. Vinoj Abraham, Professor at the Centre for Development Studies highlighted that the challenge of unemployment had started peaking prior to the Covid-19 pandemic, starting from 2017-18. The unemployment rate was 6% and in 2017-19, it started rising. Covid-19 has had an extreme effect on the economy. The information available, especially from CMI, states that the unemployment rate shot up in April-May, 2020, and became better from June onwards.
The issue of unemployment became clearer with the increased media attention on the helpless migrants who were struggling to get jobs and get back to their hometowns. The Government of India tried to offer support through three stimulus packages aimed at different groups of classes. One package focuses on the poorer people but the other two were targeted at the larger and smaller businesses.
Dr. Vinoj Abraham set the context for the conversation which was further elaborated on by Dr. R.B. Bhagat, Head Department of Migration and Urban Studies at International Institute for Population Sciences. Dr. Bhagat touched upon the various aspects of how the pandemic has affected our lives, including employment, the demographic dividend, and the silence regarding the state of the migrant workers as if they are not part of the workforce.
Following the introductions, Dr. Radhika Pandey, Fellow-I, National Institute of Public Finance and Policy (NIFPP), who has written extensively on the issues of employment in India, particularly amid the pandemic, proceeded to make her presentation on #WebPolicyTalk titled “Employment Scenario, Policy, and AtmaNirbhar packages amid Pandemic: Impact, Challenges, and the Way Forward”. Dr. Pandey’s talk focussed on the current state of employment in the country and the approach of the government’s ‘Atmanirbhar(self reliant)’ package in addressing this challenge. Underlying themes of the government’s ‘Atmanirbhar’ package include creating an ecosystem to facilitate demands and to avoid cash transfers.
With the ‘Atmanirbhar’ Package 3.0, the Government is giving companies incentives to employ workers. The idea is to integrate the migrant workforce with the workforce in the formal sector.
While the government raised the allocation for MNREGA to address the problem of rising unemployment due to the influx of migrant workers, the proposal to implement an urban replica of MNREGA is on hold for now. This seems to be a well thought out decision considering the challenges of the urban infrastructure and the resource constraints faced by the urban local bodies.
Dr. Pandey further elaborated on a recent report by McKinsey that suggests that to address the challenge of unemployment in India, we need to generate at least 90 million jobs in the non-agricultural sector. To achieve this ambitious goal, it is imperative to boost the GDP to 8-8.5%, especially in manufacturing, construction, and labor-intensive sectors. The need for non-farm jobs was especially stressed upon since the agricultural sector has a saturation point and there is a lack of demand elasticity.
The policies implemented by the Government to address unemployment need to acknowledge that the informal sector is languishing and salaried jobs remain stagnant, despite an increase in entrepreneurs.
Dr. Pandey also provided her insights on the National Employment Policy. She emphasized its need to have a more holistic approach to address the issue of unemployment. It is important to look at the composition of employment for more gainful employment in the formal sector. There is a low and declining female participation rate, low productivity and lack of quality jobs, and threat of automation. There is also a critical need for a shift from agriculture to manufacturing. Moreover, the enterprise structure is missing a middle man – it has a sizable proportion of small enterprises and otherwise large, but nothing in the middle.
The percentage of women participating in formal employment is declining and the informal sector is especially exploitative towards women.
There are some accompanying factors to address with the National Employment Policy to address the rising unemployment rates in our country. For one, economic policy certainty is needed. Uncertainty means private stakeholders will not cooperate with the government and that’s imperative for job creation.
Secondly, public-private partnership is necessary to avoid unnecessary cost escalation for the private sector which can lead to projects being frozen. Essentially, economic policy certainty, contract enforcement, and dispute redressal are some key factors that need to be addressed. It is also important to recognize that programs like the ‘Garib Kalyan Yojana(Poor Welfare Scheme)’ require an identification strategy first. Such a strategy is imperative for the informal sector also by keeping in mind the people you want to cover in the transformation program.
The talk, spearheaded by Dr. Radhika Pandey, focused on the employment scenario in India, how it changed during the pandemic, some key initiatives by the government to address these challenges, and how these initiatives can be further improved. The other speakers that contributed to the discussion with their insightful suggestions included Dr. Vinoj Abraham who moderated the session, Dr. R.B. Bhagat who chaired the session, Prof Utpal K De, Professor of Economics at NEHU, and Dr. Amrita Pillai, Research Fellow at National Institute of Public Policy.
Acknowledgments: Sajili Oberoi is a research intern at IMPRI. She has completed her bachelor’s degree in political science from Ramjas College, Delhi University.
By Dr. Arjun Kumar and Ritika Gupta, Impact and Policy Research Institute (IMPRI)