With job creation lagging targets, Prime Minister Narendra Modi on Sunday brought in new ministers for three key ministries—labour and employment, skill development and entrepreneurship, and the ministry of micro, small and medium enterprises (MSME).
Through this, the Prime Minister has put the spotlight on employment generation again, an agenda that made him popular among a huge young and aspirational demography in the run-up to the 2014 general elections.
Missing jobs continue to haunt the government three years after it assumed office. India faces the challenge of creating jobs for a predominantly young population. But though a million people are entering the workforce every month, the number of jobs created is far lower; between 2011-12 and 2015-16, India created 3.65 million jobs a year, according to industry lobby group Confederation of Indian Industry.
While the change in ministers is seen as an indictment of those who led the ministries, the question is whether the new set of ministers—Dharmendra Pradhan as skills minister with Anant Kumar Hegde as his junior minister, Santosh Gangwar as labour minister and Giriraj Singh as minister of state (independent charge) of MSME—can deliver better outcomes for employment generation.
“In 2014, jobs and skills were two key drivers of the ruling coalition. To be honest, we have fallen short on both labour reforms and skill development,” said Rituparna Chakraborty, senior vice-president of staffing company Teamlease Services. MSMEs can create a lot of jobs provided the authorities ensure a conducive atmosphere, she added. “It is expected that the new ministers will be required to deliver hard numbers and more so before 2019,” she added.
Pradhan is considered a good performer and his elevation to cabinet rank was an indication of that. He will now manage both petroleum and skills ministries.
Pradhan and Hegde will have three key tasks at hand: accelerate the pace of skill development to achieve targets; bring jobs to the trainees; and put the whole skill ecosystem in order.
“We in industry feel that despite funds and the intent, clarity in implementation was missing. If they wish to see an impact before 2019, they need to put one system from day one and try their best to execute it without changing too many things every other month,” said Tahsin Zahid, chairman, skill development committee at industry lobby group PHD Chamber of Commerce and Industry.
Zahid said skill training without job linkages will be counterproductive and implementing agencies need to fix accountability. For example, according to official date, under the Pradhan Mantri Kaushal Vikas Yojana, a flagship skills scheme, in 2016-17 the National Skill Development Corp. (NSDC) trained 557,000 people but placed only 63,000 in jobs—a success rate of less than 12%, against a requirement of 70%.
In labour, Gangwar will have to restart the reform process and create an environment where industries will feel at ease to do hiring without regulatory constraints. He too will have to take along the powerful trade unions who allege the government has been ignoring them.
Gangwar told India Today TV channel on Sunday that he knows the importance of jobs and will work to expedite job creation. He also said he is for taking the labour unions along in critical decision makings.
“Employment protection is good but they have to create atmosphere of job creation by promoting industry and entrepreneurship. It’s time for taking bold labour reform decisions,” Chakraborty added.
She said the MSME ministry faces further challenges because small companies have been disrupted by both demonetisation and the goods and services tax. MSMEs are job drivers and it’s important to create a policy which will help them grow, she added.
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