India's Job Battlefield: Balancing Right to Work with the Right Work

India faces a complex challenge in balancing the right to work with the pursuit of the right work. This dilemma is exacerbated by the country’s labour force participation rate and the growing number of youths entering the job market annually. According to the Centre for Monitoring Indian Economy (CMIE), India’s labour force participation rate has hovered around 40% recently, with a significant gender disparity—only about 20% of women participate compared to over 55% of men. Each year, over 12 million young Indians join the workforce, eager to secure employment. However, the mismatch between job availability and the aspirations of these job seekers creates a significant employment battle.

The Skill Gap Dilemma

A critical issue is the growing number of graduates who possess degrees but lack the necessary skills. A report by the National Sample Survey Office (NSSO) found that 33% of India’s youth are unemployed despite having degrees. According to a study by Aspiring Minds, only 3.84% of engineers are employable in software-related jobs at start-ups. The Indian education system often emphasizes theoretical knowledge over practical skills, resulting in graduates who are not adequately prepared for the demands of the modern job market. As Nandan Nilekani, co-founder of Infosys, notes, "Our education system needs to pivot towards skills-based learning to prepare students for real-world challenges."

The Gig Economy: A Double-Edged Sword

The gig economy has emerged as a double-edged sword in this scenario. On one hand, it offers flexibility and the potential for higher earnings, making freelancing an attractive option for many. On the other hand, the gig economy can promote a sense of complacency and discourage individuals from pursuing more stable, long-term employment opportunities. This trend has led to a rise in the number of freelancers, which, according to a report by PayPal, stands at over 15 million in India. Furthermore, the gig economy is projected to grow to $455 billion by 2023, indicating its significant impact on the employment landscape.

Declining Interest in Labor-Intensive Jobs

India’s labour-intensive sectors, such as agriculture and manufacturing, are experiencing a decline in interest from the youth. Many young people are drawn to white-collar jobs and tech-driven industries, creating a significant mismatch between the jobs available and the jobs desired. This disconnect not only affects the individuals seeking employment but also hampers the growth of sectors that are crucial to the nation’s economy. Rituparna Chakraborty, co-founder of TeamLease, states, "There is a pressing need to make blue-collar jobs more attractive through better wages and working conditions." Data from the Ministry of Labour and Employment shows that employment in the manufacturing sector declined by 3% between 2016 and 2020.

Political Freebies and Dependency Culture

The political freebie culture prevalent in India has also contributed to the employment challenge. Schemes like the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) have provided short-term relief and income support to rural populations. However, they have also inadvertently discouraged active employment-seeking and skill development. "Such schemes, while well-intentioned, can sometimes create a dependency culture," according to economic analysts. Additionally, with over 8 million new Employees' Provident Fund Organisation (EPFO) accounts added each year, the formal sector is growing, but not fast enough to absorb the increasing number of job seekers.

Lack of Skilled Training Institutes

The lack of sufficient skilled training institutes in India has resulted in a shortage of skilled labour. While there are numerous educational institutions, very few focus on imparting practical, industry-specific skills. This gap has created a workforce that needs to be equipped to meet the demands of the job market, leading to high unemployment rates among educated individuals. The Confederation of Indian Industry (CII) estimates that only 10% of the workforce receives formal training. Moreover, a 2019 Ministry of Skill Development and Entrepreneurship report highlighted that only 2.3% of the workforce has undergone formal skill training.

The Perception of Labor Dignity

The perception of the dignity of labour in India also plays a role in the employment battle. Manual and labour-intensive jobs are often viewed with less respect compared to white-collar positions. This societal attitude discourages many from pursuing careers in sectors that require physical labor, despite the availability of jobs in these areas. According to a study by the International Labour Organization (ILO), India’s informal sector, which includes many labour-intensive jobs, employs about 81% of the workforce but is often stigmatized and undervalued.

The “Quick Buck” Mentality

Moreover, the “quick buck” mentality prevalent among many young Indians has led to a rise in activities such as stock market trading and gambling as sources of regular income. While these activities can provide short-term financial gains, they do not contribute to long-term career growth or stability. This focus on quick profits diverts attention from developing skills and seeking meaningful employment. A 2020 survey by the Securities and Exchange Board of India (SEBI) revealed that over 50% of retail investors are under 30 years old, indicating a growing trend among the youth to seek quick financial gains.

Global Solutions to Unemployment

Several countries have successfully addressed unemployment and job mismatch issues with innovative ideas. Germany’s dual education system, for instance, combines classroom learning with hands-on vocational training, ensuring that students graduate with practical skills. Denmark’s “flexicurity” model balances flexible hiring and firing practices with strong social security and active labour market policies. Singapore invests heavily in continuous education and training programs, ensuring that its workforce remains adaptable and skilled. According to the World Economic Forum, Singapore's SkillsFuture initiative has provided training subsidies to over 500,000 people since its inception in 2015.

Conclusion: Towards a Balanced Employment Strategy

Key Learnings:

Skill Gap: A significant number of Indian graduates lack practical skills, resulting in high unemployment despite holding degrees.

Gig Economy Impact: While freelancing offers flexibility, it can also lead to complacency and avoidance of long-term employment.

Job Mismatch: There is a notable disconnect between the jobs available and the jobs desired by the youth, particularly in labour-intensive sectors.

Political Freebies: Government schemes like MGNREGA, while beneficial in the short term, may create dependency and discourage active job seeking.

Training Deficit: The lack of skilled training institutes contributes to a shortage of industry-ready labour.

Labour Dignity: Societal attitudes toward manual labour need to change to make such jobs more appealing.

Quick Buck Mentality: A focus on short-term financial gains through trading and gambling detracts from long-term career development.

Way Forward:

Educational Reform: Shift the education system towards skill-based learning to better prepare students for the job market.

Enhancing Vocational Training: Increase the number of skilled training institutes and align their programs with industry needs.

Promoting Labor Dignity: Improve wages and working conditions in labour-intensive jobs to attract more workers.

Balanced Government Schemes: Design government employment schemes that encourage skill development and active job seeking.

Global Best Practices: Implement strategies from countries like Germany, Denmark, and Singapore, focusing on vocational training, labour market flexibility, and continuous education.

By addressing these key areas, India can achieve a balance between the right to work and the pursuit of the right work, ensuring sustainable employment for its growing workforce.

With a year-on-year GDP growth of 7%, an increase in jobs is inevitable. However, this growth must be matched by effective solutions to bridge the skills gap and align job availability with aspirations.