Robust economic growth and sustained efforts by the government have proved inadequate in generating enough employment to meet the country’s labour force requirements in recent years. While compound annual growth rate of employment during 2004-05 to 2011-12 remained a dismal 0.5%, the domestic labour force grew by 2.9% annually, Economic Survey 2014-15 reported.
After a period of slow progress during the second half of the last decade, employment generation in India has picked up, adding 1.4 crore people to the workforce between FY10 and FY12. However, according to the report, it fell short by some 10 lakh people from the incremental growth in labour force during the period.
During 2001-11, growth in population has declined compared to the previous decade, augmented by a transition of demography towards higher number of people in the employable age group. But, for India, increasing the employability of labour force remains a challenge.
According to the Labour Bureau Report 2014, India’s formally skilled workforce accounts for 2% of the total compared to 96% and 80% for South Korea and Japan, respectively. According to the National Skill Development Corporation, between 2013 and 2022, India needs at least 12 crore skilled people in the non-farm sector. And “the current capacity for skilling is grossly inadequate and needs to be speedily scaled up to meet immediate” needs, the survey has cautioned.
Issues like poor employment growth in rural areas, specially for females, persist and “call for diversification of livelihood from agriculture to non-agricultural activities”, it said. According to it, structural changes have been noted in India’s labour market. Employment in secondary and tertiary sectors rose to 24.3% and 26.8% respectively in 2011-12, from 18.1% and 23.4% respectively in 2004-05. The major obstacle to quality employment generation is the small share of manufacturing in total employment. However, data from the 66th NSSO round (2011-12) indicates a revival in employment growth in manufacturing from 11% in 2009-10 to 12.6% in 2011-12.
Poor showing
* According to Labour Bureau Report 2014, India’s formally skilled workforce accounts for 2% of the total compared to 96% and 80% for South Korea and Japan
* The obstacle to quality employment generation is the small share of manufacturing in total employment
