May Day Spl: Are Indians employable in new economy?

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Jobs are shrinking in government and organised industry. The only new jobs are expected to come from the service sector and knowledge of the English language is becoming a must; yet graduates pouring out of colleges are described as unemployable.

On Labour Day, the question that CNN-IBN’s show Face the Nation raised was: are Indians employable in the new economy?

On the panel to discuss the issue were Labour and Employment Minister Oscar Fernandes; Director, Liberty Institute, Barun Mitra; Director, Rural & Economic Development Division, SEWA, Reema Nanavaty; and COO and Director, Info Edge Hitesh Oberoi.

The debate was initiated by asking if by refusing to bite the bullet on labour reforms, is the Government obstructing development in the employment sector.

Fernandes said that whatever the government does, it should follow a tripartite system.

“We are in touch with the labour and the management. Government is taking initiatives. Constantly we have these interactions and whatever decisions we take, we take them in a tripartite forum,” he explained.

Crisis of Skill

Without labour reform, it is impossible for industrialists to feel confident about setting up enterprises. Are Indians becoming more employable or less employable given the demands of the new economy?

Barun said the issue needed to be looked at in two parts. “The new economy,” he said, “that’s reflected in your survey, includes those who are highly employable. They can probably compete with the best in the world.”

He highlighted that the problem, however, was that these highly employable workers form only two per cent of the country’s labour force.

“At least 90 per cent of the work force is in the unorganised or the informal economy that would never be able to compete with the new economy because they are struggling to survive even in the old economy,” Barun reasoned.

Self-employment: the new alternative?

There’s a school of thought that self-employment is the future for those working in the unorganised sector. This will make getting a livelihood easy.

Agreeing with the viewpoint Reema Nanawaty said that in the new economy, alternative forms of organisations of workers is of prime importance.

“We have some demonstrative, working viable models such as SEWA’s Trade Facilitation Centre (TFC) or the agro-business companies which are owned and managed by the rural working women themselves. I think unless and until we recognize these kinds of economic organisations of the informal workers themselves they will not be able to integrate into the mainstream of the new economy,” Nanawaty suggested.

Quantity Vs Quality

Isn’t there increasingly a talent deficit despite having people who have lots of degrees and qualifications on paper?

Hitesh replied in the affirmative, attributing the reason for the deficit to the changing GDP of the nation.

“There was no problem till 5 or 6 years ago when India was growing at five per cent a year. But ever since the economy has touched the 8-9 per cent mark, there has been huge shortage of people in the new economy,” he reasoned.

“The problem is,” he added, “not the number of people but the quality of people passing out of educational institutes. For example, we work for a lot of companies in the IT sector. There are about five lakh engineers who graduate every year but only 1.5 lakh are actually employable. These other 3.65 lakh are paying for their education, spending 4 years but they are not getting jobs.”

Alternative Career Prospects

An argument often made by economists is that increasing respect and remuneration should be given to vocational professions like carpentry, plumbing, etc rather than the conventional BA, MA degrees. Is that, then, the way forward?

Barun rejected the suggestion arguing that most kinds of vocational trainings, around the world, are imparted through apprenticeship.