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A Convoluted Approach to Job Creation
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Context
The Economic Survey and the FY25 Union Budget have highlighted the challenge of jobless growth in India, prompting the government to introduce several employment-linked incentive schemes. However, there are concerns regarding the sustainability and effectiveness of these initiatives amidst broader economic uncertainties.
Job Market Realities and Challenges
- Jobless Growth: Official data reveals limited growth in manufacturing sector jobs, with significant reductions in employment across unincorporated non-agricultural sectors.
- Workforce Composition: Majority of India's workforce is self-employed or engaged in unpaid work, with a notable increase in agricultural employment despite aspirations for non-farm sector jobs.
- Employment Demand: Economic Survey projects a need for nearly 78.5 lakh non-farm jobs annually until 2030, emphasizing the scale of employment generation required.
Government's Supply-Side Incentive Schemes
- EPFO Linked Incentives: Introduction of wage subsidies and incentives for first-time employees enrolled in EPFO, aiming to stimulate job creation in formal sectors.
- Skilling and Training Initiatives: Upgradation of 1,000 Industrial Training Institutes with significant financial outlay, alongside Prime Minister's Internship program targeting youth skilling and employability enhancement.
- PM's Package for Employment and Skilling: Allocation of ?2 lakh crore over five years to generate employment opportunities and upskill 4.1 crore youth, aligning with long-term employment targets.
Critique of Government Strategy and Alternatives
- Sustainability Concerns: Doubts over the longevity of jobs created through incentive schemes beyond the subsidy period, potential for misuse through payroll manipulation.
- Alternative Approaches: Advocacy for expanding MGNREGA to urban areas, increasing entitlement beyond 100 days, and boosting capital expenditure in labor-intensive sectors.
- Economic Growth Dynamics: Debate on the accuracy of GDP estimates amid discrepancies in inflation rates and the reliance on fiscal stimulus versus private sector dynamism.
Mains Question:
Q. "Discuss the efficacy and challenges of the government's supply-side incentive schemes for employment generation amidst the backdrop of jobless growth in India. Critically evaluate the alternative policy measures that could be adopted to address the unemployment crisis in the country."
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