Mains Paper 3: Economy
Prelims level: Employment
Mains level: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment
• India often feels secure in the growth of its demography and a decreasing dependency ratio.
• On the other hand, every time we observe a group of young men loitering on a side street or the outskirts of a village, we are reminded of the dark shadow of a demographic liability.
• China is going through the pains of a working-age population that has peaked at 1 billion citizens and starting to decline rapidly.
• In 15 years, a similar process will happen in India, as our dependency ratio peaks and then declines.
• The next decade will be decisive for India to use its growing demography to foster inclusive growth.
• This next decade is a “do or die” moment for slaying unemployment.
• Social tensions are rising as “two Indias” emerge from a demographic perspective.
• The north and east have high fertility rates, low labour force participation and high marginal employment.
• In contrast, the west and south have low fertility rates and, in some instances, is showing shortage of manpower.
• This is resulting in interstate migration, creating social tensions.
• The west and south are resentful when they see “outsiders” stream in on packed trains.
• The north and east are likely to experience increasing social strife when a digitally alive population fails to fulfil their aspiration.
• Of every 100 additional employment requirement for the country in the coming decade, 80 will be in the 10 large states in the north and east where demography is still in its surge phase.
Large scale local employment needed
• Creating large-scale local employment will be essential for inclusive growth, and is a key agenda for the country over the coming decade.
• Employment opportunities will require the focus on smaller districts that house a majority of our population and still remain rural or semi-urban and in some cases tribal.
• Even if large-scale manufacturing and traditional information technology services can be relocated to these districts, automation is reducing the number of jobs they produce.
• Employment generation requires district-level effort for job creation that link local entrepreneurs to markets, with solutions that use local resources.
• A new approach to large-scale employment has to understand that employment generation is the task of citizens, society, and the private sector, not just the government.
• Employment generation starts with the strengths, resources and capabilities of that region.
• These resources require market connects, which generate revenues for a local entity, or which can highlight local assets, as with tourism.
• We have named this approach Nagarik to highlight its focus on citizen leaders as job creators.
• This approach addresses the challenge of creating large-scale employment as an opportunity for inclusive growth.
• The approach takes local leaders, local resources as the starting point of employment generation.
• For instance, agro-processing, dairy, non-timber forest product, local tourism are resources that are specific to a region or a district and should be a starting point for employment generation.
• Local resources, production units, have to be better connected to the market for creating employment.
Challenges for this approach
• Underlying this approach is a change in mindset.
• Most narratives for our 1.3 billion democracy sees citizens as passive consumers.
• Nagarik starts by looking at citizens and local entrepreneurs as producers, not mere consumers.
• It then creates an enabling ecosystem that shifts the focus of economic value creation from larger cities to smaller towns using local resources from that area.
• It uses market connects as the starting point. Our smaller towns and districts are rich in resources and talents, but are not connected to the national or international market, an issue directly addressed by Nagarik.
• Connecting local entrepreneurs to the market using local capabilities of that district is a key feature of Nagarik.
• An initial assessment of districts understands which local resources will be of use to the regional, national and international markets.
• The nature of the processing, manufacturing or in some cases services interventions are identified given this market connect.
• The platform also identifies local entrepreneurs who are able to create and man the units, and strong finance connects are also facilitated.
• In some cases, “mega themes” like a tourist circuit would necessitate project management and intervention from the regional or state government, although this is rare.
• The result is local direct job creation in those local enterprises as well as indirect job creation as local produce is collected, processed and exported.
• A number of private sectors companies are taking part in this approach as part of the mainstream business, not CSR.
• This approach can drive efficiency in the economy with lower cost, wider sourcing structures while providing employment to a large number of people in smaller districts.
• However, given the complex, 360-degree relationships and stakeholder partnership, the structures, processes and outcomes from this approach require committed partners guided by a strong convening agency. The adoption of this approach in different states and districts is gaining momentum as a citizens’ movement. It’s a once-in-a-lifetime opportunity to build India, keeping the citizen at its centre and utilizing the bountiful resources of our smaller districts where employment is most needed.
Q.1) With reference to the Prime Minister’s Employment Generation Programme
(PMEGP), consider the following statements:
1. It is a credit-linked subsidy programme launched by the Ministry of MSME.
2. It aims to generate continuous and sustainable employment opportunities in
both rural and urban areas of the country.
3. Khadi and Village Industries Commission is the nodal agency for its
implementation at the national level.
Which of the statements given above is/are correct?
(a) 1 only
(b) 1 and 2 only
(c) 2 and 3 only
(d) 1, 2 and 3
Correct Answer: D
Q.1) How the employment opportunities will require the focus on smaller districts that house majority of the population?