Govt must focus on post-Covid employment crisis

India must address the employment crisis triggered by Covid-19.
The government must make efforts to sustain, support and generate more employment to revive demand, and facilitate economic recovery.

The government has done well in containing the effects of the Covid-19 pandemic on the economy and employment situation. Given the depth of the pandemic and its devastation, more efforts will be helpful in staging a robust recovery of the economy.

Some issues and a few suggestions related to employment in India are being made. As is well known, employment severely suffered worldwide during the pandemic, especially for the female labour force. The graduating students also suffered as new hiring generally halted. To facilitate economic recovery and generate demand in the post-Covid period, efforts will have to be made by the government to sustain, support and generate more employment.

Given the changed pattern of output in the economy, there will be a shift in the employment scene across the country that needs to be recognised and addressed to even out the wrinkles. Further, many new job opportunities are available in the western world, and given demographic dividend in India, a fruitful mapping can be attempted.

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Post-Covid support to employment

In this context, the government may like to consider supporting policies in terms of public and private Sector. The public sector in terms of banks, insurance, schools, hospitals and public sector undertakings has done well on employment during the pandemic. In the private sector, one can conceive two major sectors — one is paid employment, and the other is self-employment.

In the paid employment component, there is an organized sector, including big industries and institutions. It is the organized private sector where attrition has been very high, and the informal sector where loss of job opportunities is stark, that needs support through policy. Therefore, the private sector should contribute in conceiving/providing policy inputs to generate employment.

The government can ask these big industries, very well represented through important trade associations like CII, FICCI, ASSOCHAM, PHDCCI to prepare a blueprint for employment in the next few years, till economic conditions normalise. In the informal sector, the government can consider extending the MUDRA loan which with just ₹10,000 has the potential to create 2-3 jobs in terms of food carts, local vendors like selling fruits, vegetables, clothes, utensils on the street corners and making pottery and handcrafts.

The Government also can consider actively engaging the incubation centres, 110 operating successfully, to encourage start-ups. In the self-employment segment the government could also ask SIDBI with the help of financial institutions including Indian Banks Association to prepare a plan to generate support in the self-employed segment. The increase in the amount of Mudra Loan and fall-back mechanism for the start-ups is necessary. These policy drafts, if placed in the public domain, can help generate debate as well as inspire confidence in the initiatives.

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Opportunities: Permanent and temporary

The employment opportunities that need to be considered can be divided into two — permanent and temporary. Across the world, due to Covid-19, commercial industries are starved of resources and uncertain about profit margins. Therefore, there has been a spurt in the rise of temporary jobs in countries like the US. In India, we could also consider the recovery phase in terms of permanent and temporary jobs.

The jobs and industrial houses where employment opportunities are large and labour intensive are mainly construction, housing, food processing, knitwear, furniture and of course, the MSMEs. The government may consider asking the Indian Banks Association as well as trade Associations to explore what financial requirements can be made to encourage self-employment as well as growth in the labour-industries indicated above.

Mapping job opportunities abroad

In the foreign countries, many more job openings have emerged because of the high mortality rate of Covid. In India, there has been significant job loss for women across the country, following the global pattern. To encourage women to join back the labour force, the government can consider a few innovative ideas. First, support the industry through some financial incentives that offer increased opportunities to engage females. Second, identify on-line job opportunities across the world, given successfully expanded digital infrastructure, and encourage females to take advantage of the same.

In general, the government can also identify job opportunities abroad where physical presence is required and given the advantage of demographic divided in India, map them, skill the workforce appropriately, and export trained labour force through proper agreements. The embassies can be of a big help in such an endeavour.

(Dr. Charan Singh is the chief executive of EGROW Foundation, a Noida-based think tank. He was the non-executive Chairman of Punjab & Sind Bank. He also served as full time visiting faculty and former RBI Chair Professor (Dec 2012 to Dec 2016) at the Indian Institute of Management Bangalore.)

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