Ambitious urban employment guarantee programme need of the hour: Economists, activists

An ambitious urban employment guarantee programme is the need of the hour, say some of the country's leading economists and activists who assert that this can transform the economy as well as contribute significantly to an improved quality of life for millions of Indians.

They say a multiplier effect resulting from reduced unemployment and underemployment, and increased incomes will boost demand in small towns and create conditions for successful entrepreneurship in a distributed fashion.

Also increased productivity as well as improved quality of life due to better-functioning public goods and services, increased employability and productivity in the private sector due to skilling, rising informal sector incomes due to an effective wage floor and reversal of ecological degradation are some of the other suggestions they envisage for the economy at large.

Some of India's foremost intellectuals, activists and policymakers like Saarthi Acharya, Vijay Mahajan and Madan Pataki examine different aspects of the unemployment epidemic in the third volume of the ambitious 14-part project "Rethinking India Series".

This latest volume "Reviving Jobs: An Agenda for Growth", edited by Santosh Mehrotra, was released by Penguin Random House on World Labour Day.

Since 2012, the number of youth entrants into the labour force has increased at an accelerating pace, while the number of jobs created has decreased, the contributors say, adding this situation might become graver between 2020 and 2030 as the labour force swells further.

"Reviving Jobs" offers suggestions on how India can make the best use of the remaining period of its demographic dividend - any failure to do so will cause millions to suffer in poverty for decades to come.

According to Mehrotra, who is professor of economics at the Centre for Labour, Jawaharlal Nehru University, India has a jobs crisis and more young people in absolute numbers are joining the labour force looking for work, but the proportion of those finding work is lesser than before.

"The working-age population is increasing, as a share of the total population - the so-called demographic dividend - but less people are looking for work. As a result, the labour force participation rate (LFPR) is falling, both for men and women," he says.

"This suggests an increasing number of youth are turning into discouraged workers, in the sense that an unsuccessful search for work is leading to many more dropping out' of the search. This situation prevails on top of a historically unprecedented open unemployment rate, which rose from 2.2 per cent to 6.1 per cent over six years (201218)," he goes on to add.

The open unemployment rate of youth (15 to 29-year-olds), he says, went from 6.1 per cent to 17.8 per cent in the same period.

"This is nothing short of a crisis for India's current and future GDP growth, which seriously risks its demographic dividend. This, and what to do about it, is the subject of this book.