Private sector to power growth in jobs, says study

The private sector will be the engine of growth in employment in the organised sector in the next decade, a joint study by the Confederation of Indian Industry and Planning Commission has said.

"We need to understand that hire and fire is not on the government's agenda, but labour flexibility is needed to ensure employment. We do believe that we need more flexibility in labour laws," Planning Commission Deputy Chairman Montek Singh Ahluwalia said today.

Addressing the Employment Summit organised by CII here, he said the government was considering expanding the skill development mission in the 11th Plan from 100 to 500 industrial training institutes across India.

"However, even this is inadequate. The private sector has a major role to play in delivering job-related training because private colleges are more flexible in curriculum development than government institutions," he said.

The CII-Planning Commission report said that with 60 per cent jobs and 20 per cent contribution to the GDP, the income disparity between the agriculture and non-agriculture sectors was high and expected to increase further over the next few decades.

To arrest the decline in real wages in agriculture, the approach paper to the 11th Plan visualises that the agricultural workforce should reduce by around 10 million during the plan period and non-agricultural employment increase by at least five per cent per annum to absorb not just this shift but also all new entrants into the labour force.

Ahluwalia said, "There is a need to shift excess labour from the agriculture to non-agriculture sector, besides increasing the share of labour in the organised sector."

R Seshasayee, president, CII said, "The projected employment increase will materialise despite the continued thrust on capital, technology, and knowledge intensity in Indian industry."

The scenario with regard to retailing and SEZs is still unfolding. Though retailing is manpower-intensive, it is difficult to predict the net effect on employment of the changes likely in the sector.

At least 2 lakh customer associates will be needed in the next five to six years. The study says the retail revolution will benefit millions of farmers and secure better jobs for lakhs of people.