Making a case for promoting highly productive and well-paid jobs, NITI Aayog has said that not unemployment but a “severe under-employment” is the main problem facing the country.
The government think-tank, in its three-year Action Agenda, released last week, has said that a focus on the domestic market through an import-substitution strategy would give rise to a group of relatively small firms behind a high wall of protection. “Contrary to some assertions that India’s growth has been ‘jobless’, the Employment Unemployment Surveys (EUS) of the National Sample Survey Office have reported low and stable rates of unemployment over more than three decades.
“The more serious problem, instead, is severe underemployment,” the Aayog said in the Action Agenda. “What is needed is the creation of high-productivity, high-wage jobs,” it added. Citing examples of South Korea, Taiwan, Singapore and China, it said: “The ‘Make in India’ campaign needs to succeed by manufacturing for global markets.” Noting that with Chinese wages rising due to an ageing workforce and many labour-intensive sectors in that country looking for lower-wage locations, the Aayog said, “with its large workforce and competitive wages, India would be a natural home for these firms.” “Therefore, the time for adopting a manufactures— and exports—based strategy could not be more opportune,” it added.
The Aayog recommended the creation of a handful of Coastal Employment Zones, which may attract multinational firms in labour-intensive sectors from China to India. Making a case for reforming labour laws, the Aayog noted that recently fixed-term employment has been introduced in the textiles and apparel industry.