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 I ndia.

Employment and Unemployment
Scenario in the World
Almost all countries in the world have employment
and 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 labour
force
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.
S
S.No. Item 2013-2014
1. Total Population as on Jan. 2013 1392.96 Million
(Projected)
2. Total Labour Force 489.94 Million
3. Total Employment 459.10 Million
4. Total number of open 20.84 Million
Unemployment
5. Unemployment rate as percentage Around
of total labour force 2. 3 %
6. Employment in Organised Sector(2004) 36.4 Million

EMPLOYMENT AND UNEMPLOYMENT
SCENARIO IN INDIA
S.No. Item 2012-2013
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 Million
Note: openly unemployed are those who did not carry out any gainful activity during
last 365 days.

Labour Force participation rates (LFPR), Work Force participation
rates (WFPR) and Unemployment rates: International Comparison

Country LFPR WFPR Unemployment
Rate
India 43.0 42.0 2.3
China 77.0 - -
Japan 62.9 58.3 4.9
Australia 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
STRUCTURE OF 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
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.
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 attempted
through growth process and through special
employment generation programme
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.

Productivity, Employment Growth and
Development(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 from
sector to sector.
While in services sector these have high
correlation,the industrial and agriculture sector
the correlation is low. (Continued)


Productivity, Employment Growth and
Development(Continued)
Unlike in developed countries, in developing
countries like India where demand has not yet
reached the saturation point Productivity
increase 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)
PROBLEMS
Population growth and consequential increase in the
labour force. 10 to 12 million persons are entering the
labour force every year.

Productivity and income generation from employment
are low.

Though, open unemployment is only2.3%(11 million)
the percentage of the population below the poverty
line is high. The fact of being employed is obviously
no guarantee of escaping from poverty,which in our
situation refers to a very basic level of subsistence.

Out of around 470 million work force as many as
130million are working poor. Therefore the problem
is of the order of 130+11=141 million.

MAIN ISSUES
There are primarily two main issues namely:-
I ssue no-1
How to provide employment to the new entrant
to the labour force and to the unemployed. That
is how to create additional employment
opportunities needed.
I ssue no-2
How to improve quality of employment so that
productivity and income level of the workforce
increases.

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

Action taken to tackle Issue No-1
Planned Initiative. Tenth Plan envisages creation
of around 10 million jobs each year, around 6
million 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

Action taken to tackle Issue No-2
Provide skill training to the new entrants to the
labour force

Improving skill level of the work force.

Organise Skill training as per the market
demand. That is, it should cater to the needs of
both organised and unorganised sector.
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 through
private 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 master
craftsman,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.
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.


Continued
Skill Training Addressed to Informal
Sector
Skill acquisitions through informal means can not
be 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 Training Addressed to Informal
Sector (Continued)

In the Institute of Excellence being developed it
is aimed that side by side with production of
world class workman modular course will help
them in self employment and engagement in
informal sector.
Various Ministries and Departments also are
addressing the needs of informal sector while
designing skill training for the sector dealt by
them.