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Budget 2018 December 26, 2017

India’s First National Employment Policy

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Here are a few gloomy facts about India’s job sector. The unemployment rate has risen to a five-year high of 5 percent in the FY 2016 and out of the ones who are employed, less than 10 percent are employed in the organised sector. This hints at a crude fact that while lakhs are still searching for jobs, the large chunk is working where social securities like provident fund, gratuity, and pension are not a part of the employment contract.

But the Government of India seems to have taken a leaf out of prominent books on job creation and has decided to come up with a more organised and structured approach towards employment generation. Education and health-focused policies of government could bear some notable fruits; hence the upcoming union budget can come with what can be India’s first National Employment Policy.

Let’s see what the National Employment Policy can have on offer.

Although the draft is not out yet and it is only through media reports that the policy is being viewed as a part of the impending budget, its broad contours can be imagined by deciphering traditional issues in India’s job sector.

  1. The policy might come up with incentives for employment-intensive industries

The foremost is the lack of incentives for employment-intensive industries and enterprises within these (Also read: Are You Managing, rewarding or promoting your workforce’s talent? ). The corporate taxation regime of India looks at all enterprises with the same eye and the irony is while big corporates manage to save on taxes and duties, thanks to the skills of their finance teams, the MSME sector, which employs most of the workforce after agriculture sector, ends up paying more than justifiable taxes and other government levies.

  1. Perks for units that move from being unorganised (lacking social security benefits for the workforce) to being organised.

For the employment policy to be result-oriented, incentives, both financial and non-financial, must be in place for those units that spend relatively more money on labour costs. Another set of perks must be set aside for units that move from being unorganised (lacking social security benefits for the workforce) to being organised. Here the government can mull reimbursing enterprises on money spent towards employers’ contributions to provident fund and pension.

  1. Planned push to both economic growth as well as job creation

Only after proper assessment of sectors of economy and industries within them and by aiming to give a planned push to both economic growth as well as job creation, the final contours of the National Employment Policy shall be designed. More than one crore persons are added to the already high workforce of the country every year and preparing a roadmap for their enabled future needs proper appraisal of where we lacked and how the holes can be plugged.

We know figures for credit growth, factory output, addition to new job prospects have been unpromising for the past couple of years. Demonetisation and Goods and Services Tax gave a twin blow to the manufacturing sector, with ripple effects felt across segments. The best way out to address the issue of lack of jobs for the Indian youth was to frame a robust policy that can accord pace to the job creation drive, and the government seems to have hit the target.

Suvipra view

Job creation touches both economics and political discourse; it can then be expected that the policy to push this component will be comprehensive and target-oriented.

Also read: Is Uberisation of Workforce Fast Becoming a Reality?

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3 responses to “India’s First National Employment Policy”

  1. Dr. B N Bhardwaj says:

    I hope this policy is not only on paper but is executed properly

  2. Sarika Sharma says:

    Anything for startups in this policy?

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