QUESTION : What do you mean by vulnerable employment? With India having one of the highest poor quality jobs tackling the issue of urban jobs becomes important. Comment.
URBAN EMPLOYMENT AS THE FOCAL POINT
Urban Employment Crisis
WHY IN NEWS ?
The contraction of the economy due to Covid-19 pandemic has raised concerns about the employment situation in urban areas. While the ‘Garib Kalyan Rojgar Abhiyan’ launched in June 2020 could be an immediate relief, the ₹50,000-crore employment scheme may not be a suitable substitute for decent urban jobs.
THREATS TO EMPLOYMENT :
- Slowdown in Major Employment Generating Sector: The shrinking sectors that have been affected the most —construction (–50%), trade, hotels and other services (–47%), manufacturing (–39%), and mining (–23%) — are those that create the maximum jobs in the economy.
- Reverse Migration: The magnitude of economic slowdown can be exemplified by a wave of massive ‘reverse migration’ during the early phase of the lockdown whereby millions of workers returned to their home States due to a loss of livelihoods in cities.
- Vulnerable Informal Sector: According to the International Labour Organization, of the 535 million labour force in India in 2019, some 398.6 million have poor quality jobs. Further, the lockdown exposed the state of vulnerable employment in urban low-end informal jobs.
- Vulnerable employment is characterised by inadequate earnings, low productivity and difficult conditions of work that undermine the basic rights of workers.
- The high and persistent incidence of vulnerable employment are a reflection of the nature of the structural transformation process, whereby capital and labour transfer from low to higher value-added sectors.
- Increasing Number of Working Poor: Despite higher economic growth in recent years, working poors are increasing in India.
- The service sector-led growth in recent years has intensified this as there is coexistence of strong job creation in some Information and Communication Technology (ICT)-intensive services.
- The poor quality of jobs and high informality are key for the high level of “working poors”. The working poor are working people whose incomes fall below a given poverty line due to low-income jobs and low familial household income.
CAUSES FOR HIGH INCIDENCE OF INFORMALITY :
- Urbanisation : Due to the high pace of urbanisation in India, capital and labour are moving from low value-added activities in a sector to another sector, but not to higher value-added activities.
- Creation of poor quality jobs: The service sector-led growth in recent years has intensified this as there is coexistence of strong job creation in some Information and Communication Technology (ICT)-intensive services, along with a significant portion of the jobs being created in ‘traditional low value-added services.
- To generate more jobs and second
- To reduce vulnerabilities by providing decent wages and some form of job security.
TYPES OF UNEMPLOYMENT IN INDIA :
- Disguised Unemployment:
o It is a phenomenon wherein more people are employed than actually needed.
o It is primarily traced in the agricultural and the unorganised sectors of India.
- Seasonal Unemployment:
o It is an unemployment that occurs during certain seasons of the year.
o Agricultural labourers in India rarely have work throughout the year.
- Structural Unemployment:
o It is a category of unemployment arising from the mismatch between the jobs available in the market and the skills of the available workers in the market.
o Many people in India do not get job due to lack of requisite skills and due to poor education level, it becomes difficult to train them.
- Cyclical Unemployment:
o It is result of the business cycle, where unemployment rises during recessions and declines with economic growth.
o Cyclical unemployment figures in India are negligible. It is a phenomenon that is mostly found in capitalist economies.
- Technological Unemployment:
o It is loss of jobs due to changes in technology.
- Frictional Unemployment:
o The Frictional Unemployment also called as Search Unemployment, refers to the time lag between the jobs when an individual is searching for a new job or is switching between the jobs.
- Vulnerable Employment:
o This means, people working informally, without proper job contracts and thus sans any legal protection. These persons are deemed ‘unemployed’ since records of their work are never maintained.
MULTI-PRONGED STRATEGY TO TACKLE THE ISSUE OF URBAN JOBS :
- Given the scale of urbanisation, the focus on urban employment generation programmes should be in coordination with local governments. Actors at the local level need to have more resources at their disposal.
- Employment intensive investment policies should embrace both private entrepreneurs as well as by the government. Private investments need to be facilitated by conducive contractual relations between labour and capital. Small and micro enterprises need extra support to balance the interests between labour and capital.
- Prioritising labour intensive urban infrastructure: A labour intensive approach to building municipal infrastructure can be a cost effective alternative to capital intensive approach as wage rates are low. Infrastructure investments will generate employment and earnings. Construction of low cost housing, building large scale medical, health and sanitation infrastructure in cities and towns across India can be carried out using labour intensive methods.
- While MGNREGA or its substitutes will not be able to absorb a significant proportion of workers (given millions of workers have returned to their home States due to a loss of livelihoods during the pandemic situation), MGNREGA needs to be strengthened and their capacity increased. It can be expanded by both increasing the budgetary allocations and the guaranteed minimum number of days of work.
WAY FORWARD :
- In order to create a better employment condition for India, both the central and state governments need to formulate certain specific schemes to improve the working conditions in terms of occupational safety, working hours, payment of adequate wages.
- There is a need for National Employment Policy (NEP) that would encompass a set of multidimensional interventions covering a whole range of social and economic issues affecting many policy spheres and not just the areas of labour and employment. The policy would be a critical tool to contribute significantly to achieve the goals of the 2030 Agenda for Sustainable Development.
- Mobilising Localised Resources: Given the scale of urbanisation, the focus on urban employment generation programmes should be in coordination with local governments.
- Localised Employment-Intensive Investment Policies: A major local initiative would be to design and implement employment-intensive investment policies.
- Prioritising Urban Infrastructure: There is a need to prioritise urban infrastructure as it accounts for a large share of total investments in the overall economy.
- Launching of Urban Employment Scheme: There is need for immediate launch of an urban employment scheme oriented toward building large-scale medical, health and sanitation infrastructure in cities and towns across India.
- Increase Incentives to Reduce Migration: Focusing on rural development to increase employment opportunities in rural areas and to enhance the provision of services like education, health, electricity and water and sanitation services are effective means to control rural to urban migration
- For workers in urban areas more jobs need to be generated and vulnerabilities need to be reduced by providing decent wages and some form of job security.
QUESTION : Significance of World Bank’s Ease of Doing Business Report as far as Indian economy is concerned . Comment
Topic- FOR A DIFFERENT YARDSTICK
World Bank’s Doing Business
WHY IN NEWS ?
The article examines the need to revamp the World Bank’s ‘Doing Business’ survey to make it more comprehensive.
IMPORTANCE OF DOING BUSINESS REPORT TO INDIA :
India has made remarkable progress on the Doing Business rankings as India has improved its rank by 79 positions in five years (2014-19).
As per the ‘Doing Business’ 2020 report, India had jumped 14 places to the 63rd position on the ease of doing business ranking.
The Doing Business report has been a valued tool for countries seeking to measure costs of doing business.
The Doing Business indicators and methodology are designed with no single country in mind, but rather to help improve the overall business climate.
In the 2020 Doing Business report, published in 2019, India was among those economies that were recognised for their “most notable improvement”.
EASE OF DOING BUSINESS INDEX :
- The doing business index estimates the cost to business from regulations. Erratic procedures and delays hamper business in India and simplifying procedures brings economic benefits.
- The survey assumes that lower tax rates are best and it supports lighter rules and regulation to encourage shifts from informal to formal sectors.
- The desire for better ranking in the index has encouraged countries to even slash down vital regulations which could have a detrimental impact in the long run.
- There are concerns that the index sidesteps the societal costs of deregulating pollution, worker safety, and health risks.
IGNORING THE IMPACT:
- Several indicators of the Doing Business survey presume that less regulation is better, but ignore the impact on health, ecology, worker protection and right to information.
- The 2008 global financial crisis resulted from too little banking supervision.
- The Centre and the States in India must take into consideration workers’ well-being while considering changes to labour laws, especially during the pandemic.
- Global lessons warn India of the pitfalls of diluting the 2005 Right to Information Act.
- The survey assumes that lower tax rates are best, which overlooks each country’s fiscal requirements.
- The doing business index needs a total revamp wherein aspects such as safety standards, labour rights and environmental performance also find a provision.