Context: In the backdrop of the upcoming budget for FY26, Confederation of Indian Industry (CII) has proposed a 7-point agenda to boost employment generation in the country.
Relevance of the Topic: Mains: Analytical questions on concerns related to employment generation and suggestive measures.
About Unemployment in India
- The official data source of Employment/ Unemployment indicator in India at present is the Periodic Labour Force Survey (PLFS) conducted by the Ministry of Statistics and Programme Implementation (MoSPI) since 2017-18.
- As per the latest available Annual PLFS reports, the estimated Unemployment Rate (UR) for youth of age 15-29 years in the country in the year 2023-24 was 10.2%.
- There exists a state of disguised unemployment in the agriculture sector which engages 45% of the labour force with only 16% of GVA contribution.
- The growing unorganised and GIG sector in the economy poses challenges in job security, social benefits etc.
Suggestions by CII
India, with a median age of 29, is set to add 133 million people to its working-age population by 2050.
- Integrated National Employment Policy: CII suggests focusing on drafting a comprehensive employment policy that consolidates various employment generating schemes across ministries and states to streamline efforts and maximise impact.
- Data-driven employment insights: CII suggests developing a Universal Labour Information Management system (ULIMS) to provide insights of jobs, skill demand, training program etc.,
- Boosting Labour-Intensive sectors: There should be a focus on labour intensive sectors like construction, textile, and tourism by national and international collaborations.
- Empowering Rural Youth: As per CII, rural youth is in a limbo between reducing jobs and stagnant agriculture. Therefore, a rural internship program for college graduates could strengthen government initiatives in rural areas.
- Increasing Female Workforce Participation: CII proposes CSR-funded creches in industrial clusters and formalisation of the care economy. These initiatives along with the women safety laws and women friendly work culture will enhance the job market by women participation.
- Incentives for Hiring: CII advocated replacing section 80JJAA of tax provisions that will allow employers to avail enhanced deductions for hiring new employees.
- Tapping Global Job Market: The provision for the International Mobility Authority under the MInistry of External Affairs will boost the job market for Indian youth. Focus should be on tapping international opportunities like H1B visas of the US and CECP with Australia.
Major Challenges in Employment Sector in India
- Sub-optimal skill: Indian labour has a low formal training percentage i.e., 5% as compared to 95% of South Korea.
- Employer hesitation: The stringent labour norms and additional compliances on the employer are swaying away from employers for new hirings.
- Fragmented job market: Indian job market is highly fragmented in different sectors, this leads to the hurdles in hiring on the basis of specified skill demand.
- Automation: The rise of AI and machine learning is further opposing the hiring of individuals.
Conclusion: Unemployment in India remains a pressing issue, with both structural and policy challenges to address. Leveraging India’s demographic dividend through targeted policies, skill development, and sectoral focus is essential for creating a sustainable and inclusive job market. The Union Budget 2025 provides an opportunity to address these concerns comprehensively.