Labour Market Performance and the Labour Market Performance and the - - PowerPoint PPT Presentation

12 September 2011 1

Labour Market Performance and the Labour Market Performance and the Challenges of Creating Employment in India Challenges of Creating Employment in India

Presentation at the Expert Group Meeting on “The Challenges of Building Employment for a Sustainable Recovery”

International Labour Organization Headquarters, Geneva, (23-24 June, 2011)

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Structure of Presentation

• Labour Market Performance

– Unemployment Rate – Occupational Diversification – Wages

• Employment Challenges

– Problems with School Education – Problems with Skill Enhancement

• Policy Implications
• Recent Activities of IAMR Related to Employment

– Evaluation of ITIs and ATS (Completed) – Census of Vocational Training Providers and Skill Gap Analysis (Ongoing)

• Other Activity of IAMR (India-HDR)

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Labour Market Performance

GDP Growth (%) per annum 1960s 3.5 1970s 3.5 1980s 5.6 1990s 5.7 2002-3 to 2006-7 7.8 2007-8 9.3 2008-9 6.8 2009-10 8.0 2010-11 8.6 Growth in Employment (%) per annum 1977-78 to 1983 2.0 1983 to 1987-88 1.5 1987-88 to 1993-94 2.2 1993-94 to 1999-2000 1.2 1999-2000 to 2007-8 1.4

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Labour Market Performance

• High Unemployment rate despite significant GDP growth

– Service sector led GDP growth (more than half of GDP accounted for by service sector) – Labour intensive industries have lagged behind in terms of growth – Average growth rate for the last 6 years shows agri, forestry, fisheries (3.5%), mining and quarrying (5.1%). On the other hand trade, hotel, transport, communication (10.5%), and finance, business, insurance, real estate (11.8%)

• High unemployment rate among SC and ST social groups. In 2007-8

unemployment rate (by CDS) RURAL URBAN SC – 12% SC – 10.1 ST – 7.5% ST - 10.0 Others – 6.4% Others – 6.0

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Labour Market Performance

• Occupational Diversification

– Increasing importance of rural non-farm sector

Distribution of Population by Occupation Type (Rural) 1993-4 2007-8 Self-employed in non-agriculture 13.1 15.2 Self-employed in agriculture 42.4 39 Agricultural labour 27.5 25.1 Other labour 7.5 11.3

• Regular wage employment lowest among STs (7%) as against

24% for Others

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Labour Market Performance

• Considerable section of workers employed in low wage jobs

– 22% of workers living below the poverty – Incidence of poverty highest among casual workers (32%)

• Wage difference across occupation and gender (NSS Report No.

531) Employment Rural wage (Rs) Urban wage (Rs) male female male female Regular wage 175 108 276 213 Casual labour in public works (rural) 76 71

• Casual labour in
• ther works

67 48 87 51

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Challenges in Creating Employment

• Lack of school education

– Mean years of schooling 4.2 years – Drop-out rate 20% (6-17 years) – Financial constraint an important reason for discontinuation – Government schools do not have adequate infrastructure and teacher absenteeism high – Rapid expansion of private un-aided institutions with higher fees

• One-third of workforce of 395 million in unorganized

sector illiterate

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Challenges in Creating Employment

• Serious problems with technical education

system affecting skill development

– Already shortage of skilled manpower in the country – Predominance of private institutions with high fee structure – Curricula mostly outdated – Inadequate infrastructure – Mismatch between training and requirement of the industry – Absence of interaction between industry and training institution

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Policy Implication

• School education

– Public expenditure on school education should go up – Kothari Commission (1966) recommended 6% of GDP to be spent on

• education. It has mostly been around 3%
• Unskilled employment

– Public work programmes like MGNREGA – Such programmes also create productive assets in rural areas

• Skill enhancement

– Periodical training of the workers – Accreditation system to recognize informally acquired skills – Upgradation and modernization of institutions through greater linkages with industries – ITIs taken up by Govt (100) in 2005-6 and World Bank (400) in 2006-7 to convert them into Centres of Excellence

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Recent Activity of IAMR

• Evaluation of Industrial Training Institutes and

Apprenticeship Training Scheme

– Low Female Participation (few ITIs for women, infrastructure

bottlenecks like no hostel facilities for women, few trades which suits females)

– Students mostly come from poor economic background, agriculture being the principal occupation – Vocational education and training is looked extremely down up on, like a last resort – Quality of practical learning weak (only 10% of teachers are

degree holders, weak institute-industry linkage and outdated workshops, no training in soft skills)

– Most employment in unorganized private sector with low salary

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Recent Activity of IAMR

• Census of Vocational Training Providers (VTPs) and

Skill Gap Analysis

– Pilot survey in two Districts of India – Will be scaled up to include many more districts once the methodology is finalised – The objectives are

• To create a database of VTPs in both formal and informal sectors
• What type of courses are being offered and their relevance in terms
• f employment
• Whether VTPs have sufficient infrastructure and skilled trainers
• What kind of interventions can improve the functioning of VTPs

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Other Activity

• India Human Development Report

– Only the second report, earlier one was published in 2001 – The focus this time is on social inequalities and religious inequalities – Brings out the non-inclusive character of growth in India – Highlights the fact that there exists a synergy across various socio-economic sectors which operate in the form

• f feedback loop in terms of both input and output in the

development process. Input in one sector has its influence in other sectors. – There are certain sections of the society which suffer from multiple deprivation