Good news for job seekers! 1st employment policy in Budget 2018 on cards

Before India goes to polls in General Elections 2019, the government is likely to provide India with its first National Employment Policy (NEP) to address the crucial issue of job creation. The policy, which may be announced in the upcoming Budget, will have a comprehensive roadmap outlined for all the employers and workers in a bid to create quality jobs across all sectors through economic, social and labour policy interventions.

While's India's economy may be growing at a fast pace, the story on the jobs creation front is just the opposite. Hence, Narendra Modi-led BJP government will want to make an attempt to brighten the picture in the upcoming budget session.

The National Employment Policy will include

— Incentives for employers to create more jobs

— Reforms to attract enterprises

— Help for medium and small scale industries

The idea is to address the twin issues of providing quality jobs to over 10 million youth being added to the country's workforce every year.

An official told The Economic Times, "The policy will moot fiscal incentives for employers across labour-intensive sectors to create more jobs as well as employees to get engaged in the organised sector as this would fetch them minimum wages and enough social security."

Underemployment in India

The move comes few months after government think-tank Niti Aayog said that not unemployment but a “severe under-employment” is the main problem facing the country.

"Contrary to some assertions that India’s growth has been ’jobless’, the Employment Unemployment Surveys (EUS) of the National Sample Survey Office (NSSO) has consistently reported low and stable rates of unemployment over more than three decades.

“Indeed, unemployment is the lesser of India’s problems. The more serious problem, instead, is severe underemployment,” the Aayog said in the Three-Year Action Agenda for 2017-18 to 2019-20.

“What is needed is the creation of high-productivity, high-wage jobs,” it said further.

More than 30% of India’s youth not in employment

India’s rate of employment has declined and job creation has not kept up with the growing working-age population.

It lags most other countries in creating quality jobs. Over 30% of youth aged 15-29 in India are not in employment, education or training (NEETs). This is more than double the Organisation of Economic Cooperation and Development (OECD) average and almost three times that of China.

The OECD 2017 survey also points out that for India, assessing labour market trends is made difficult by poor employment data, with information for total employment available only every five years.

Another survey of households conducted by the Labour Bureau showed unemployment rate rising to a five-year high of 5% in FY16 compared with 4.9% in FY14 and 4.7% in FY13.