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A Dash for National Employment Policy

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The New Employment Policy seeks to bring out a comprehensive plan for increasing job opportunities in the country, chiefly by initiatives like skill development, investment in employment-generating sectors and other requisite policy interventions. This is when the government is facing criticism on the overall job scenario.


It has been more than 20 months since the Covid-19 pandemic first hit India in March 2020. After the Covid-19 pandemic took away millions of jobs and raised the overall unemployment rate to alarming levels, the Narendra Modi Government has come out with a renewed focus on the country's first National Employment Policy (NEP).  The Opposition had been attacking the government for the past few years for the ‘unemployment’ issue quite hard. Today, the country's overall employment is lower than pre-pandemic levels and at least five million youth are added to the country's estimated 450-million workforce every year.

Although the proposal to bring in a dedicated NEP was first mooted in 2008 and an inter-ministerial group during the United Progressive Alliance (UPA) regime had examined it, nothing tangible emerged. 

Sources in the government said that it finally took some shape at the first meeting of the BRICS (grouping of Brazil, Russia, India, China, and South Africa) employment working group in 2016. The Bharatiya Janata Party led National Democratic Alliance government started work on it. But that too couldn’t move much.

In June 2020, Prime Minister Narendra Modi asked a Group of Ministers (GoM) constituted for skill development and employment generation amid the Covid crisis to come up with an NEP within four months, which will serve as a long-term vision document for improving the job scenario in the country. He also asked the ministries to look beyond the migrant crisis and focus on the entire social landscape and make specific policy suggestions for job creation and skilling.

Laying out a sectoral roadmap

The GoM suggested framing an NEP similar to the National Education Policy.  “The policy will have a medium to long term perspective providing a framework for an inter-sectoral strategy for employment and economic growth. It will also look at enhancing the skills and human resource development, including overall labour welfare and labour market governance in the country,” said the GoM document. Led by then Social Justice and Empowerment Minister Thawarchand Gehlot, it had suggested that the NEP should lay out a ‘sectoral roadmap’ with incentives for employment generation.

The draft employment policy will make use of extensive studies of the labour market and factor in the impact of the pandemic on shifts in employment patterns. NEP could lay down job targets across sectors and recommend measures to boost segments with potential for mass employment, officials with knowledge of the development said. An expert committee panel being set up to draft the country’s first jobs policy will draw on data and evidence from five ongoing national employment surveys.

The panel will hold cross-sector consultations and will likely have broad representation from industry, ministries, including labour, skill development, commerce and agriculture, as well as experts and economists, according to plans afoot at the labour ministry. “The government may form a high-powered committee in which the views and recommendations of the committee will be taken,” said one official. The NEP would take shape based on data from five all-India labour surveys and the recently launched E-Shram portal to facilitate evidence-based policy making for employment generation.

The expert committee is also expected to formulate sector-specific investment plans to boost jobs in sectors that depend on a large workforce, such as textiles. It will also recommend measures to strengthen the gig economy.

Although Union government is yet to set up any committee to frame a proposed national employment policy, in a written reply to a Parliament question, Rameswar Teli, Minister for State for labour and employment, confirmed that the government had launched three employment surveys, namely the All-India Quarterly Establishment-Based Employment Survey (AQEES), the All-India Survey on Migrant Workers and the All-India Survey on Domestic Workers.

Ongoing surveys of labour markets

According to the International Labour Organization (ILO) study, domestic workers are believed to be at least 4 million strong but there is little official information on their actual number; and little is known about their work conditions and average pay. These surveys are in addition to All-India Survey of Employment Generated by Professionals and All-India Survey of Employment Generated in the Transport Sector. The AQEES showed a 29 per cent increase in employment in nine sectors in the months of 

April-June 2021 over a base of 2013-14 and a jump in jobs in sectors such as IT, business process outsourcing and manufacturing.

Analysts say that the ongoing surveys of the labour markets will help formulate policies for both formal and informal segments of the economy. They will also help design social security measures for workers, including those employed in the gig economy. The surveys are critical as they will provide insights into the employment and socio-economic condition of migrants and other informal workers.

The surveys undertaken by the National Sample Survey Office (NSSO) are the primary source of statistics on labour force, activity participation of the population and structure of employment and unemployment in the country. The behavior of the labour market depends on the trend and pattern of the overall economy.

Recently, Bupender Yadav, Union Labour Minister, rolled out the country’s first survey of domestic workers, the latest among a group of national jobs enumeration campaigns aimed at discerning data on the country’s vast informal workforce that will feed the NEP. In September, the government had released the results of the first AQEES for the April-June 2021 quarter. India lacks updated data on the economy-wide number of workers in the informal sector. As the country doesn’t have an official short-term, high-frequency jobs data, the AQEES will fill the critical gap.

Economists usually depend on the Periodic Labour Force Survey (PLFS) or data from the Centre for Monitoring Indian Economy (CMIE), a private data firm. For the record, the Ministry of Statistics and Programme Implementation launched PLFS in April 2017, considering the importance of availability of labour force data at more frequent time intervals. The objective of PLFS is primarily twofold: To estimate the key employment and unemployment indicators in the short time interval of three months for the urban areas only in the ‘Current Weekly Status’ (CWS) and employment and unemployment indicators in both rural and urban areas annually.  Now the third Annual Report is being brought out by NSSO on the basis of PLFS conducted during July 2019-June 2020.

Ballooning unemployment rate during the pandemic

India’s unemployment rate in October 2021 rose to 7.75 per cent from a three-month low of 6.86 per cent in September 2021, according to latest data from CMIE. The emphasis on NEP comes in the wake of rising unemployment in the country. According to private think In April 2020, the unemployment rate touched a record high of 23.52 percent when the country was under a nationwide lockdown. As per CMIE, during the April-June 2020-21 quarter, some 121 million jobs were lost, the highest ever monthly job loss on record since it started compiling employment data.

On August 26, the labour ministry had launched the National Database for Unorganized Workers — the E-Shram portal — which is a platform for registering an estimated 380 million informal and unorganized workers including construction workers, street vendors, domestic, agricultural and migrant workers, and other similar sub-groups of unorganized/informal workers. As per the latest information, 11 crores unorganized workers have registered on the E-Shram portal. The database will facilitate the implementation of policies for the unorganized sector. It will also help in monitoring and supervision of government policies and ensure that benefits reach the targeted group.

Workers can benefit from any policy initiatives only if they get a job with reasonable pay and decent work conditions. In the past, except the pandemic period, India witnessed a relatively high growth but it failed to generate enough quality employment for the majority of Indians, resulting in a decline in the living conditions of millions trapped in low-quality employment especially in unorganized sectors.

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