India is the world's fastest-growing major economy with the largest youth population. Indian government plans to create 20 million jobs a year for the next five months, by focusing primarily on manufacturing.
However, International Labour Organisation's Director-General Guy Ryder feels that thus far, there is little evidence to suggest that the Indian economy will mirror China's story – where an agrarian economy gave way to a manufacturing-led one – or that the manufacturing sector will absorb youth across the spectrum of skill levels and education.
In an interview with Scroll.in, Ryder, who visited India recently, said that given the wide social disparities in the country, policy-makers, while pushing growth, will have to simultaneously focus on rural workers and bring about gender parity in wages.
However, International Labour Organisation's Director-General Guy Ryder feels that thus far, there is little evidence to suggest that the Indian economy will mirror China's story – where an agrarian economy gave way to a manufacturing-led one – or that the manufacturing sector will absorb youth across the spectrum of skill levels and education.
In an interview with Scroll.in, Ryder, who visited India recently, said that given the wide social disparities in the country, policy-makers, while pushing growth, will have to simultaneously focus on rural workers and bring about gender parity in wages.
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Excerpts from the interview:
Status of women workers
India has one of the fastest-growing economies in the world, but only 27% of our women are in the workforce, which puts India second from the bottom among G-20 countries, above only Saudi Arabia. What could be hindering women workers?
In India, between 2005 and 2012, women’s participation rate slid from 37% to 27%. Research by the International Labour Organisation and others has identified a number of reasons. Women do more unpaid economic activities within homes – meaning their economic contributions are often simply not counted.
At the same time, while employment in agriculture is falling overall, it is happening faster among women. Between 2004-'5 and 2009-'10, more than 20 million women left the agriculture workforce, compared to five million men.
Moreover, jobs are not being created in locations or sectors that are easy for women to access or enter. There exists a considerable gap between what men and women are paid for the same work and this discourages women from participating. Increased educational enrolment of young women has also contributed towards a decline of women in the workforce.
In general, however, it should be getting easier for women in India to join the workforce; they are now better educated, have fewer children and live in a growing economy. But more needs to be done to get a higher number of women into the workforce and allow those who are there to make maximum use of their talents and energy and get paid properly for doing so. Preventing them from doing this restricts the prospects of future national social and economic growth.
shift from an agriculture- and services-based economy
The Indian government does attach a lot of importance to the development of the manufacturing sector, which is why you have national initiatives like Make in India and Skill India among others. This sector does indeed help in assuring better-quality jobs.
It is commonly said (by academicians and policymakers) that rapid economic development requires industrialisation. Some pockets of manufacturing have done very well in India, such as the automobiles sector. However, the shift of output and workers from agriculture to manufacturing has not followed the same path in India as was seen in China and elsewhere.
The bigger challenge is whether manufacturing in India can absorb large numbers of unskilled workers – this continues to be an issue as manufacturing becomes more capital and skill-intensive.
It will be important for India to promote greater industrialisation if it is to meet the macroeconomic and labour market objectives outlined in the Make in India initiative. But India also needs to address the issue of increased informality (workers in the informal sector) and the trend of informality creeping into the formal sector. It also needs to see how best to introduce skills at all levels, so that people are employed meaningfully.
It is commonly said (by academicians and policymakers) that rapid economic development requires industrialisation. Some pockets of manufacturing have done very well in India, such as the automobiles sector. However, the shift of output and workers from agriculture to manufacturing has not followed the same path in India as was seen in China and elsewhere.
The bigger challenge is whether manufacturing in India can absorb large numbers of unskilled workers – this continues to be an issue as manufacturing becomes more capital and skill-intensive.
It will be important for India to promote greater industrialisation if it is to meet the macroeconomic and labour market objectives outlined in the Make in India initiative. But India also needs to address the issue of increased informality (workers in the informal sector) and the trend of informality creeping into the formal sector. It also needs to see how best to introduce skills at all levels, so that people are employed meaningfully.
India has a large rural workforce working in agricultural production. The orthodox view in the 1980s and the 1990s suggested that the rural sector was second-best and that the road to development and structural change required getting people out of the rural sector and into manufacturing. We now realise that we have to shift the focus back to the rural economy and sector, and see how the rural and manufacturing sectors can both thrive and pave the way for an inclusive and robust economy. It shouldn’t be one at the expense of the other.
source:scroll.in
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