P K Ray

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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.

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Employment and UnemploymentScenario in the World

Almost all countries in the world have employmentand 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 labourforce

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.

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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

Unemployment5. 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

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S.No. Item 1999-2000

7. Employment in Unorganised 432.7 Million

Sector

8. No. of Jobseekers Registered with 39.3 Million

Employment Exchanges (as on 31-12-2005)

9. No. of youth registered with Employment 28.8 Million

Exchange as on 31-12-2004

10. Working Poor i.e Persons working but Around

living below poverty line(1999-2000) 130 MillionNote: openly unemployed are those who did not carry out any gainful activity during

last 365 days.

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Labour Force participation rates (LFPR), Work Force participation

rates (WFPR) and Unemployment rates: International Comparison

Country LFPR WFPR UnemploymentRate

India 43.0 42.0 2.3

China 77.0 - -

Japan 62.9 58.3 4.9Australia 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

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STRUCTUREOF 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

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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.

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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 attemptedthrough growth process and through special

employment generation programme

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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.

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Productivity, Employment Growth andDevelopment(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 fromsector to sector.

While in services sector these have high

correlation,the industrial and agriculture sector

the correlation is low. (Continued)

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Productivity, Employment Growth and

Development(Continued)

Unlike in developed countries, in developing

countries like India where demand has not yet

reached the saturation point Productivityincrease 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)

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PROBLEMS

Population growth and consequential increase in thelabour force. 10 to 12 million persons are entering thelabour force every year.

Productivity and income generation from employmentare low.

Though, open unemployment is only2.3%(11 million)the percentage of the population below the povertyline is high. The fact of being employed is obviouslyno guarantee of escaping from poverty,which in oursituation refers to a very basic level of subsistence.

Out of around 470 million work force as many as130million are working poor. Therefore the problem

is of the order of 130+11=141 million.

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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. Thatis how to create additional employment

opportunities needed.

Issue no-2How to improve quality of employment so that

productivity and income level of the workforce

increases.

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Basic 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

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Action taken to tackle Issue No-1

Planned Initiative. Tenth Plan envisages creation

of around 10 million jobs each year, around 6million 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 around

12 million persons per year were provided

employment during 2000-2005

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Action taken to tackle Issue No-2

Provide skill training to the new entrants to thelabour force

Improving skill level of the work force.

Organise Skill training as per the market

demand. That is, it should cater to the needs ofboth organised and unorganised sector.

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Skill with the Labour Force

Skill 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 throughprivate 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 mastercraftsman,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.

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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.

Skill T i i Add d I f l

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Skill Training Addressed to InformalSector

Skill acquisitions through informal means can notbe 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 T i i Add d t I f l

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Skill Training Addressed to InformalSector (Continued)

In the Institute of Excellence being developed itis aimed that side by side with production of

world class workman modular course will help

them in self employment and engagement ininformal sector.

Various Ministries and Departments also are

addressing the needs of informal sector whiledesigning skill training for the sector dealt by

them.

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THANK YOU