You are using an older browser version. Please use a supported version for the best MSN experience.

Niti Aayog says severe underemployment more serious problem than unemployment

LiveMint logoLiveMint 28-05-2017 Ashwini Shrivastava

New Delhi: “Severe underemployment” and not unemployment is a more serious problem as a job that needs to be done by one person is often performed by two or more workers, says the government’s policy think tank Niti Aayog. This assertion comes amid Congress’s criticism of the Narendra Modi government over creating lesser jobs.

In its draft three-year action agenda report for 2017-18 to 2019-20, the Niti Aayog stressed on the need for creating 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,” it said.

The draft report was circulated among the governing council members (consisting of chief ministers of all states and others) of the Niti Aayog on 23 April.

Contrary to some assertions that India’s growth has been jobless, the Employment Unemployment Surveys of the National Sample Survey Office (NSSO), which till date remain the most reliable sources of information on the country’s employment situation, have consistently reported low and stable rates of unemployment over more than three decades, it said.

Citing examples, the Niti Aayog said as per an NSSO survey, in 2011-12, 49% of the workforce was employed in agriculture but the sector contributed only 17% of India’s gross domestic product (GDP) at current prices.

Another survey in 2010-11 revealed that firms with less than 20 workers employed 72% of India’s manufacturing workforce but contributed only 12% of manufacturing output, it said. According to the 2006-07 NSSO survey of service firms, the 650 largest enterprises accounted for 38% of services output but only employed 2% of service workers.

“Put another way, the remaining service firms employed 98% of the workforce but produced only 62% of the outcome,” the report said.

Citing the example of China’s ageing workforce, the Niti Aayog stressed on attracting big firms working in that country to India which has availability of large workforce 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 ‘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 large-scale firms in labour-intensive sectors currently manufacturing in that country are looking for lower-wage locations.

“With its large workforce and competitive wages, India would be a natural home for these firms,” the report said. PTI

More From LiveMint

image beaconimage beaconimage beacon