Leveraging the labor force is a critical imperative for any nation striving for economic growth and social development. In recent times, the gap between the potential of the labor force and its actual utilization has become a pressing concern. This gap can be attributed to various factors, including outdated labor policies, insufficient skill development initiatives, and inadequate job opportunities. To address this issue effectively, policymakers must focus on creating an environment that encourages innovation, invests in education and training programs, and promotes job creation across diverse sectors. Additionally, fostering collaboration between the public and private sectors can play a pivotal role in aligning workforce capabilities with the evolving needs of the economy. By closing the gap between the existing labor force and its untapped potential, nations can unlock new avenues for economic prosperity and social advancement.
Tag: GS Paper-3: Employment; Growth & Development; Poverty; Education; Skill development; Human resource.
India’s advantageous labour force; The goal, focus and path to a productive labour market in India.
India needs to create opportunities for existing labour force and new entrants by improving productivity.
Background: India’s advantageous labour force
- India’s average age is 29 years, whereas the average age in US, China, France, Germany and Japan is 38, 38, 42, 45 and 48 years, respectively.
Working age population:
- India, with its huge population, is now in a phase in which its working-age population is rising and the old-age dependency ratio is coming down.
- The world, in contrast, is ageing with an increase in the population of the aged and a drastic reduction in fertility rates.
- India’s old-age dependency ratio will reach 37 percent in 2075, whereas the same will be 55.8 percent in France, 75.3 percent in Japan, 49.3 percent in the US, 53 percent in the UK and 63.1 percent in Germany.
- Most countries are experiencing record low fertility rates and a shrinking labour force.
- China is experiencing 6.77 births per 1,000 people.
Decoding the editorial: The labour market in India
- There is a need to create opportunities for the existing labour force and the new entrants into the labour market by improving their productivity.
- There is a need to shift a major chunk of the 45.5 percent of the labour force engaged in agriculture with low and negligible labour productivity.
Sectors in focus:
- As most of the labour force in India has limited education and skill sets, they can be used in labour-intensive manufacturing such as textiles, toys, footwear, auto components, sports goods and agricultural processing.
- Sectors like restaurants, hotels, mining and construction, healthcare and caregiving services have huge potential.
- For the manufacturing sector to grow, the following areas need to be focused upon:
- Infrastructure development to reduce trade and transaction costs,
- Trade facilitation measures,
- A better IPR ecosystem,
- Ease of doing business on the ground, and
- Rationalisation of labour laws and the taxation system.
- MSMEs need support in improving competitiveness, achieving scale, digital infrastructure, technology up-grade and branding to be part of a larger supply chain and the global value chains.
Path to a productive labour force
Skilling, reskilling and up-skilling
- 93 percent of the employment in India is absorbed by the unorganised sector, where workers are employed in underpaid jobs.
- Skilling can help India reap the demographic dividend and be a source of labour supply for the world by making the labour force more productive and efficient.
- Skill development programmes such as the Jan Shikshan Sansthan, the Pradhan Mantri Kaushal Vikas Yojana and the National Apprenticeship Promotion Scheme are welcome steps.
- The skill mission has the MSDE Vision 2025 in sight which is set to improve linkages between education and skill, catalyse demand for formal skills and create a high-skilled ecosystem.
Quality health facilities
- Though India is a pharmaceutical giant with a $50 billion industry and is a global leader in vaccines, accounting for about 60 percent of DPT, BCG and measles vaccines, it has to assure for the majority of the population:
- Scaled up access and quality health services,
- Affordable drug prices,
- Reduced out-of-pocket expenditure,
- Financial medical protection in terms of universal insurance, and
- Quality health infrastructure.
- Health equity has been assured to a great extent by reforms such as
- Ayushman Bharat,
- Swachh Bharat Mission,
- Pradhan Mantri Bhartiya Janaushadhi Pariyojana.
- Quality education facilities
- The delivery of quality education up to higher secondary education to all is imperative for making a productive labour force.
- The National Education Policy 2020 has been brought about that gives importance to updating knowledge.
- It also aims at ensuring productive employment opportunities and dignified work as listed in the United Nations Sustainable Development Goals 2030.
- The Samagra Shiksha programme was launched in 2018 to provide inclusive, equitable and quality education at all levels of school education.
The next 30 years belong to India provided we accelerate our reforms and achieve the desired results of flagship programmes of Skill India, Make in India, Start-up India, and others. It’s time to focus on labour-intensive manufacturing and human capital.
Source: Indian Express
Frequently Asked Questions (FAQs)
Q1: How can a nation effectively leverage its labor force for economic growth?
A1: Nations can leverage their labor force by implementing policies that foster innovation, investing in education and training programs, and promoting job creation across various sectors. Collaboration between the public and private sectors is also crucial for aligning workforce capabilities with the evolving needs of the economy.
Q2: What role do skill development initiatives play in leveraging the labor force?
A2: Skill development initiatives are essential for bridging the gap between the current skill set of the labor force and the demands of the job market. By providing training programs and upskilling opportunities, nations can enhance the adaptability and productivity of their workforce.
Q3: How can policymakers encourage job creation to leverage the labor force effectively?
A3: Policymakers can encourage job creation by implementing business-friendly policies, incentivizing entrepreneurship, and supporting industries with high employment potential. Creating a conducive environment for small and medium enterprises (SMEs) is also crucial for fostering job growth.
Q4: Why is collaboration between the public and private sectors important in leveraging the labor force?
A4: Collaboration between the public and private sectors allows for a more comprehensive and synergistic approach to leveraging the labor force. It facilitates the alignment of workforce development initiatives with industry needs, ensuring that education and training programs are relevant and effective.
Q5: How can a nation ensure inclusivity in leveraging the labor force for economic development?
A5: Ensuring inclusivity involves addressing disparities in access to education and training, promoting diversity in the workplace, and implementing policies that prevent discrimination. An inclusive approach ensures that the benefits of leveraging the labor force are equitably distributed across various segments of the population.
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