Jobs of the future require upskilling workers

Recent employment data in India presents contrasting trends, with the Reserve Bank of India's KLEMS data indicating a 6% job growth for FY24, while the Centre for Monitoring Indian Economy reports a rising unemployment rate of 9.2% in June 2024. This discrepancy raises concerns about job creation in light of a growing workforce.

Employment Trends and Data Discrepancies

• Conflicting Reports: The RBI reports a significant rise in job growth from 3.2% in FY23 to 6% in FY24. In contrast, CMIE indicates an increase in unemployment from 7% to 9.2% in just one month. These differences highlight the need for better data coordination and definitions among agencies.
• Skill Gaps: India faces dual skill gaps: job seekers often lack necessary skills despite qualifications, and there is inadequate skill training available. Additionally, an aspirational gap exists where available jobs do not meet the expectations of job seekers, particularly in IT and among migrant workers.
• Technological Impact: Advancements in technology, especially AI, are decreasing employment elasticity, resulting in fewer jobs being created relative to output growth. Unlike previous technological innovations that increased jobs, current trends risk replacing human roles with machines, particularly in middle management.

Strategies for Improving Employment Growth

• Educational Reforms Needed: Significant reforms in education and skill development are crucial to align with job market needs. Many graduates face higher unemployment due to a disconnect between educational quality and industry requirements.
• Balancing Growth Strategies: A dual approach is necessary: focus on industrialization in labor-intensive sectors like textiles and enhance competitiveness in technology-driven sectors like pharmaceuticals. This balance can help generate sustainable employment.
• Comprehensive Policy Framework: A sector-specific policy framework should promote both labor-intensive and high-tech industries. This approach aims to enhance growth rates, which are essential for creating new jobs.

Practice Question

Q. What are the challenges and strategies for improving employment generation in India, considering the recent trends in job growth, skill gaps, and the impact of technological advancements?