EMPLOYMENT , UNEMPLOYMENT AND TRAINING ISSUES

By

P.K.Ray Dy.Director General(Emp)

Directorate General of Employment & Training,

Ministry of Labour and Employment,Government of India.

Employment and Unemployment Scenario in the World

• Almost all countries in the world have employment and unemployment problem.

• A total number of 191.8 million persons were unemployed in the year 2005 in the world.The unemployment rate was around 6.3% of the labour force• 1.37 billion people though employed were earning

less than US$2 a day.• 520.1 million people though employed were earning less than US$ 1 a day.• The problem therefore is of the order of 711.9 million if at least one dollar a day is considered.

S

S.No. Item 2004-2005

1. Total Population as on Jan. 2005 1092.96 Million (Projected)

2. Total Labour Force 469.94 Million

3. Total Employment 459.10 Million

4. Total number of open 10.84 Million Unemployment

5. Unemployment rate as percentage Around of total labour force 2. 3 %

6. Employment in Organised Sector(2004) 26.4 Million

EMPLOYMENT AND UNEMPLOYMENT SCENARIO IN INDIA

S.No. Item 1999-20007. Employment in Unorganised 432.7 Million Sector

8. No. of Jobseekers Registered with 39.3 MillionEmployment Exchanges (as on 31-12-2005)

9. No. of youth registered with Employment 28.8 MillionExchange as on 31-12-2004

10. Working Poor i.e Persons working but Aroundliving below poverty line(1999-2000) 130 Million

Note: openly unemployed are those who did not carry out any gainful activity during

last 365 days.

Labour Force participation rates (LFPR), Work Force participation rates (WFPR) and Unemployment rates: International Comparison

Country LFPR WFPR Unemployment

Rate

India 43.0 42.0 2.3

China 77.0 - -

Japan 62.9 58.3 4.9

Australia 63.9 59.8 7.0

Malaysia 60.6 58.6 3.4

France 54.7 48.2 12.0

Germany 57.7 52.7 8.7

U.K 62.9 62.9 6.0

U.S.A. 67.7 67.7 4.2

Pakistan 49.9 49.9 5.9

Sri Lanka 57.3 57.3 10.6

STRUCTURE OF WORKFORCE

Sector World India

Agriculture 40.1% 58.5%

Industry 21.0% 18.1%

Services 38.9% 23.4%

• Vast majority of workers in Agriculture

• A significant proportion of them are below poverty line

Approach by various Countries

• Various countries are trying to address the problem of unemployment through various means.

• Developed countries are trying to have separate employment policies.

• Developing countries are relying on economic growth as well as special employment generation programme.

• Export of labour force to other countries will not be easy unless labour force in developing

countries can claim better skills.

Approach to Employment in Economic Planning-India

• Planning in India focused on economic growth.

• Generation of employment was viewed as part of the process of development and not as a goal in conflict with, or to be pursued independently of economic development

• Thus there is no employment policy as such and additional employment generation is attempted through growth process and through special

employment generation programme

Age Distribution of Population(India)Age group

1991

Male Female

2001

Male Female

0-14 37.73 37.79 35.6 35.07

15-34 33.25 34.14 33.67 33.94

35-59 22.35 21.39 23.33 22.91

60 + 6.67 6.66 7.39 8.08

•No substantial difference in age distribution between 1991 and 2001even for those in the age group 15-34.

Productivity, Employment Growth and Development(India)

• Labour productivity (in terms of per capita output) is quite low($3.05), compared to the advanced

countries like USA($40.72),UK($30.92), Even China ($4.39) has better labour productivity than that of India.• Economic development, productivity and employment growth are still positively correlated.The extent of correlation varies from sector to sector.• While in services sector these have high correlation,the industrial and agriculture sector the correlation is low. (Continued)

Productivity, Employment Growth and Development(Continued)

• Unlike in developed countries, in developing countries like India where demand has not yet reached the saturation point Productivity

increase had no retarding effect on employment.

• Technological development in various sector has not yet reached to that level which leads to

Economic growth without any employment growth.(Continued)

PROBLEMS Population growth and consequential increase in the

labour force. 10 to 12 million persons are entering the labour force every year.

Productivity and income generation from employment are low.

Though, open unemployment is only2.3%(11 million)

the percentage of the population below the poverty line is high. The fact of being employed is obviously

no guarantee of escaping from poverty,which in our situation refers to a very basic level of subsistence.

Out of around 470 million work force as many as 130million are working poor. Therefore the problem is of the order of 130+11=141 million.

MAIN ISSUES

There are primarily two main issues namely:-

Issue no-1

How to provide employment to the new entrant to the labour force and to the unemployed. That is how to create additional employment

opportunities needed.

Issue no-2

How to improve quality of employment so that productivity and income level of the workforce increases.

Basic AssumptionBasic Assumption

• Economy has the capacity to provide gainful

employment to all the persons in the labour force

• The workforce is not able to get decent work

because of non availability of skill required in the

labour market

Action taken to tackle Issue No-1• Planned Initiative. Tenth Plan envisages creation

of around 10 million jobs each year, around 6 million from normal growth process and around 4 million through special employment

generation programme proposed for various sectors.

• Economic growth and employment growth being correlated attempts are made to achieve 8%

growth rate of the economy so that anticipated employment generation takes place.

• As against a target of 10 million per year around12 million persons per year were provided employment during 2000-2005

Action taken to tackle Issue No-2

• Provide skill training to the new entrants to the

labour force

• Improving skill level of the work force.

• Organise Skill training as per the market demand. That is, it should cater to the needs of both organised and unorganised sector.

Skill with the Labour ForceSkill is acquired by the new entrants to the labour force through

two channels namely:-

1. Formal skill training through various institutions run by Government and Private. Around 2.5 million through Government Institutions and few hundred thousand through private institutions(exact estimates are not available for private sector).

2. Informal means i.e through on the job training, learn while working, apprenticeship training, helping the master craftsman,etc. Majority of the work force acquire skill through this channel . Such skills are not certified and their skill level not known and hence such workers suffer from mobility for betterment, up gradation of their skill and consequential improvement in their living.

Formal Skill Training• Training is imparted in various trades designed

primarily to suit organised sector

• Around 2.5 million get training each year through various ministries/ departments of central government.

• Industries are associated with training through

institute management committee.

• Formal test conducted and certificate issued.

Continued

Skill Training Addressed to Informal Sector

• Skill acquisitions through informal means can not be avoided.

• Skills thus obtained require testing and certification. ( for construction industry it has been taken up. For other industry it is being worked out)

• For those skills which are required and normally not obtained through informal channels/ not

available in sufficient number special efforts are made to organise modular practical oriented course by utilizing existing infrastructure( i.e ITI, polytechnics, schools etc) and master craftsman.

Continued

Skill Training Addressed to Informal Sector (Continued)

• In the Institute of Excellence being developed it is aimed that side by side with production of world class workman modular course will help them in self employment and engagement in informal sector.

• Various Ministries and Departments also are addressing the needs of informal sector while designing skill training for the sector dealt by them.

THANK YOU