While the opposition has criticised the Modi government for rising unemployment in the country; government policy think-tank NITI Aayog said in a report that not unemployment but “severe underemployment” is a more serious problem for India.
In its draft action report that covers fiscal 2018 to 2020, the NITI Aayog strained on the requirement for generating high-productivity and high-wage jobs.
“Indeed, unemployment is the lesser of India’s problems. The more serious problem, instead, is severe underemployment. A job that one worker can perform is often performed by two or more workers,” said the report which was circulated among the think tank’s Governing Council members comprising all chief ministers and other officials on April 23.
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The sample which tracks India’s employment status has been consistently low with a stable level of unemployment for over three decades, which goes against the proclamations that India’s growth has not been driven by job growth.
The report further said quoting the NSSO report in fiscal 2012 that 49% of India’s workforce was employed in agriculture, but the sector contributed only 17 percent of India’s GDP at current prices.
“Put another way, the remaining service firms employed 98 percent of the workforce but produced only 62 per cent of the outcome,” the report said. Citing the example of China’s ageing workforce, the NITI Aayog called for taking steps to attract big companies from China to India, which can provide a large number of workers at competitive wages.
“The experience of countries that managed to transform rapidly, such as South Korea, Taiwan, Singapore and China, shows that the manufacturing sector and the ability to compete in the vast global marketplace hold the key to the creation of well-paid jobs for law and semi-skilled workers,” the NITI Aayog report said.
“The Make in India campaign needs to succeed by manufacturing for global markets,” it said. The report said due to an ageing workforce in China with high wages, many big firms in labour-intensive sectors in that country are scouting for lower-wage locations. “With its large workforce and competitive wages, India would be a natural home for these firms,” the NITI Aayog report said.