Joblessness, or unemployment, is a significant issue affecting many people around the world. One major reason for this problem is the skill gap, which occurs when there is a mismatch between the skills that job seekers have and the skills that employers need. As technology advances and industries evolve, the demand for specific skills changes, but many workers find it challenging to keep up. This gap leaves many job seekers struggling to find employment, even as companies struggle to fill positions. Addressing this issue requires better education, training programs, and a focus on continuous learning to ensure that workers have the skills needed for the jobs of today and tomorrow.
Tags: GS- 3, Employment – Growth & Development – Skill Development– Human Resource, GS – 2, Government Policies & Interventions
Context:
- 50 years of national surveys on employment and unemployment have made it clear that India’s job availability has not, in general, kept pace with the rate of economic growth.
Skill Training and Unemployment:
- Poor Training of Youth:
- This pervasive joblessness is primarily due to inadequate training among the youth, with only 7% of those surveyed in the PLFS framework reporting any formal or informal training.
- Workforce Skill Training Comparison:
- Current data indicate that only 2.3% of the workforce in India has undergone formal skill training, compared to 68% in the UK, 75% in Germany, 52% in the USA, 80% in Japan, and 96% in South Korea.
- Skill Shortage Among Employers:
- According to a recent survey, 48% of Indian employers reported difficulties filling job vacancies due to a skill shortage.
- Unemployment Among Educated Youth:
- CMIE reports show that more educated Indians are more likely to remain unemployed. The last PLFS for 2023 revealed that 33% of formally trained 15-29-year-olds were jobless.
- Unemployment Rate Trends:
- India’s unemployment rate for individuals aged 15 and above dropped to 3.1% in 2023, down from 3.6% in 2022 and 4.2% in 2021.
- Among females, the unemployment rate decreased to 3% in 2023 from 3.3% in 2022 and 3.4% in 2021.
- For males, it declined to 3.2% in 2023 from 3.7% in 2022 and 4.5% in 2021.
- Recovery in Employment Scenario:
- Economic activity increased post-Covid-19 pandemic, following the lifting of lockdowns by the Centre and states.
- Urban unemployment reduced to 5.2% in 2023 from 5.9% in 2022 and 6.5% in 2021.
- Rural unemployment decreased to 2.4% in 2023 from 2.8% in 2022 and 3.3% in 2021.
- Labor Force Participation Rate (LFPR):
- LFPR in Current Weekly Status (CWS) for individuals aged 15 and above in urban areas rose to 56.2% in 2023, up from 52.8% in 2022 and 51.8% in 2021.
- Economic Growth:
- India’s economic growth surged to 8.4% in the third quarter of 2023-24.
- Sectors like manufacturing, mining & quarrying, and construction played a crucial role in driving this growth, as per data from the National Statistical Office (NSO).
- The NSO’s second advance estimate projects India’s growth at 7.6% for the fiscal year 2023-24, surpassing the initial projection of 7.3% released in January 2024.
What is Unemployment?
About:
- Unemployment refers to the condition where individuals capable of working are actively seeking employment but are unable to secure suitable jobs.
- An unemployed person is someone who is part of the labour force, and possesses the requisite skills but currently lacks gainful employment.
- Basically, an unemployed person is someone of working age, jobless, able and available to work, and actively looking for a job.
Measurement of Unemployment:
- Unemployment in the country is commonly calculated using the formula:
- Unemployment rate = [Number of Unemployed Workers / Total Labour Force] x 100.
- Here, the ‘total labour force’ includes the employed and the unemployed. Those who are neither employed nor unemployed — students, for example— are not considered a part of the labour force.
What are the Various Initiatives taken for Skill Development?
- Pradhan Mantri Kaushal Vikas Yojana (PMKVY):
- Launched in 2015, PMKVY aims to provide short-term training to youth across India, focusing on ITIs and apprenticeships. Over 10 million youth have been trained under this flagship scheme.
- SANKALP and STRIVE:
- SANKALP: Focuses on enhancing the district-level skilling ecosystem.
- STRIVE: Aims to improve the performance of Industrial Training Institutes (ITIs) through quality improvements and industry linkages.
- Initiatives from Various Ministries:
- Nearly 40 skill development programs are implemented by 20 central ministries and departments.
- The Ministry of Skill Development and Entrepreneurship alone contributes about 55% to the total skilling efforts.
- Since 2015, these initiatives have trained nearly four crore people in traditional skills.
- Mandatory CSR Expenditure in Skilling:
- Corporations in India, mandated to spend on Corporate Social Responsibility (CSR) under the Companies Act, 2013, have invested over ₹100,000 crores in social projects.
- Approximately ₹6,877 crores were allocated to skilling and livelihood enhancement projects, benefiting states like Maharashtra, Tamil Nadu, Odisha, Karnataka, and Gujarat.
- TEJAS Initiative for Skilling:
- Launched at the Dubai Expo 2020, TEJAS aims to skill Indians for overseas employment opportunities, particularly in the UAE.
- It focuses on training, certification, and preparing the Indian workforce to meet skill demands in the UAE market
- Skill India Programme:
- The “Skill India” programme aims to train a minimum of 300 million skilled people by the year 2023.
- Pradhan Mantri Kaushal Vikas Yojana (PMKVY):
- A component of Skill India, under which the government pays the training fees.
- It includes “short-term training” lasting between 150 and 300 hours, with some placement assistance by Training Partners upon successful completion of assessments.
- Ministry of Skill Development and Entrepreneurship:
- Created in 2014 to harmonise training processes, assessments, certification, and outcomes, and to develop Industrial Training Institutions (ITIs).
Challenges:
- Insufficient Training Capacity:
- The training was inadequate to ensure job placement for those trained, resulting in a low employability rate.
- Lack of Entrepreneurship Skills:
- While some PMKVY trainees were expected to start their own businesses, only 24% did so, with only 10,000 applying for MUDRA loans.
- Low Industry Interface:
- Many training institutes have low industry interface, leading to poor performance in terms of placement records and salaries offered.
- Low Student Mobilisation:
- Enrolment in skill institutes like ITIs and polytechnics remains low compared to their capacity, due to low awareness among youths about skill development programmes.
- Employers’ Unwillingness:
- The joblessness issue is not only a skills problem but also reflects the lack of recruitment appetite among industrialists and SMEs.
- Limited access to credit due to banks’ NPAs has led to a decline in investment and negatively impacted job creation.
- Target Achievement:
- The Skill India target was to reach 300 million young people by 2023, but only 25 million had been trained by the end of 2018, partly due to mismanagement and lack of candidates.
- Employment Post Training:
- Many trained under Skill India and PMKVY are unable to find jobs.
- The number of beneficiaries increased from 350,000 in 2022-23 to 1.6 million in 2023-24, but the employment rate dropped from over 50% to 30%. Under PMKVY, only 15% of those trained secured jobs.
Way Forward:
- Enhanced Expenditure on Education and Training:
- In the long run, Skill India will not suffice if government expenditures on education remain low.
- The allocation for school education has declined from 2.81% of the budget in 2013-14 to 2.05% in 2018-19, which is alarming.
- Evaluation of Training Institutes:
- The NSDC should develop techniques to evaluate the performance of training institutes and encourage better performance.
- Skills Survey:
- Conduct surveys to determine exact skill requirements from employers.
- Analysing these surveys will help design course structures for training programs and develop standardised curricula and delivery systems.
- Learning from Global Models:
- India needs to learn from technical and vocational training/education models in countries like China, Germany, Japan, Brazil, and Singapore, which had similar challenges in the past.
- It should adopt a comprehensive model that can bridge skill gaps and ensure the employability of youths.
UPSC Civil Services Examination Previous Year Question (PYQ)
Prelims
Q:1 With reference to Pradhan Mantri Kaushal Vikas Yojana, consider the following statements: (2018)
- It is the flagship scheme of the Ministry of Labour and Employment.
- It, among other things, will also impart training in soft skills, entrepreneurship, and financial and digital literacy.
- It aims to align the competencies of the unregulated workforce of the country to the National Skill Qualification Framework.
Which of the statements given above is/are correct?
- 1 and 3 only
- 2 only
- 2 and 3 only
- 1, 2 and 3
Ans: (c)
Q:2 Disguised unemployment generally means (2013)
- large number of people remain unemployed
- alternative employment is not available
- marginal productivity of labour is zero
- productivity of workers is low
Ans: (c)
Mains:
Q:1 “Demographic Dividend in India will remain only theoretical unless our manpower becomes more educated, aware, skilled and creative.” What measures have been taken by the government to enhance the capacity of our population to be more productive and employable? (2016)
Q:2 Most of the unemployment in India is structural in nature. Examine the methodology adopted to compute unemployment in the country and suggest improvements. (2023)
Source : IE
FAQs
Q: What is joblessness?
- Answer: Joblessness, or unemployment, is when people who are able and willing to work cannot find a job. This can happen due to various reasons, such as economic downturns, lack of job opportunities, or changes in industry demands.
Q: What is a skill gap?
- Answer: A skill gap occurs when workers do not have the skills needed for the available jobs. This mismatch means that even though there are job openings, people might not be qualified to fill them because they lack the necessary training or education.
Q: How are joblessness and skill gaps related?
- Answer: Joblessness and skill gaps are related because one often causes the other. If there is a significant skill gap in a particular industry, people may be unemployed because they do not have the required skills for the available jobs. Similarly, high joblessness can indicate that workers’ skills are not aligned with market needs.
Q: Why do skill gaps happen?
- Answer: Skill gaps happen due to various reasons, such as rapid technological advancements, changes in industry demands, outdated education systems, and lack of access to quality training programs. As industries evolve, the skills required for jobs change, and workers need to keep up with these changes.
Q: How can joblessness and skill gaps be reduced?
- Answer: Reducing joblessness and skill gaps involves improving education and training programs to match market needs, encouraging lifelong learning, and offering vocational training and apprenticeships. Governments, businesses, and educational institutions can work together to ensure that workers are equipped with the necessary skills for current and future job markets.
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