The Financial Express

Tackling unemployment

Published: March 19, 2020 21:06:52 | Updated: March 21, 2020 21:09:17

Tackling unemployment

Considering the country's laudable performance on the economic front as evidenced by its steady GDP growth -- 8.1 per cent in FY 18-19 and 7.9 per cent in FY 17-18 -- one would have expected that the job market was also expanding in a matching fashion. But it is not; for the employment picture that emerges is quite to the contrary. Actually, over the past years, the employment sector witnessed a constant decline. A study shows that while from 2005 to 2010, the national employment had grown at a 3.3 per cent rate, it more than halved to 1.7 per cent between 2010 and 2016. Another set of statistics reveals that during 2016-18, 45 per cent of the country's entire labour force were jobless, whereas a decade back (2006-10), the unemployment figure was 29 per cent. The increase in unemployment rate by 16 per cent in a decade is, needless to say, concerning.

When growth is shy of sharing economic dividends by way of absorbing the surplus workforce, especially the increasing number of unemployed educated youths, a fault line shows up to be addressed in earnest. A negative growth is reportedly visible in several large and medium-sized industrial units including in the apparels, textiles, pharmaceuticals, furniture, leather and leather products manufacturing sectors.

As a way out, many economists have advocated for the introduction of labour-saving technology in some of these ventures in their bid to increase productivity and they have tried to explain the apparently paradoxical development in that light.

Though in the age of technological revolution one can hardly afford to be a Luddite, still, given the country's existing social and economic realities where the number of job positions available is few compared to the ever-swelling ranks of job-seeking workforce, it would be only fair on the part of enterprises going modern to be sensitive about the workers losing their jobs as a result of automation. They can do either of the two things or both; namely, use the technological shift to create new jobs and secondly retrain and refit those facing retrenchment into new jobs by way of rehabilitation.

However, the overseas job market has been looking up for our unskilled and semi-skilled labour force in varying degrees. But that prospect, too, may not be long lasting one, because there is no guarantee that the host countries, as they are so rich, will  also not go for introducing advanced automation including robots and Artificial intelligence (AI) in their own workplaces in the foreseeable future.

In this backdrop, any talk of retrenchment without rehabilitation is utterly self-defeating. So, it would be advisable for both the private and public sector industries to come up with adequate measures to compensate the retrenched workers.

Also, programmes have to be launched through public-private partnership to undertake skills development initiatives for the unemployed youths and create new avenues for self-employment as well as jobs in the newly emerging industries.

The imperative is to restructure the government's policy of providing industrial incentives so that it is more inclusive and accommodative, especially, of labour-intensive ventures.

The key element of all considerations, whether on the question of distributing the government's various incentives among the existing industries or that of formulating its policies in view of the imminent technological shifts in the emerging industries, should be creation of jobs for the ever swelling ranks of workforce.


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