There is a need to nurture the informal and unorganised sector in India in order to address the problem of unemployment, former member of the erstwhile Planning Commission Arun Maira said on Thursday.
Speaking at a discussion organised by Ficci on 'Economy of Jobs' here, Maira said the organised sector -- which has easier access to low-cost capital -- will not employ a large labour workforce as it is highly capital-intensive.
"On the other hand, the unorganised sector has a problem that it doesn't get access to capital, and when it does get capital, it is very costly," he said.
"Let's honour this unorganised and informal sector... We need to find what are the constraints on the informal sector and what problems does it face," Maira said.
The former Planning Commission member said the current skilling process in the nation was not solving the problem of unemployment but was making it worse. He added that a change in mindset was needed.
Maira said while we admit that the world is changing and that technology is less predictable than before, "yet we adopt a system for skilling where we ask sectors to predict the types of jobs and number of people they would require in five to ten years".
"To work out investments, institutions and certifications to produce these people is the old way for a much more stable world. What we need now is an ecosystem of small module skill providers which people can access without leaving their places of work," he said.
NITI Aayog member Bibek Debroy said manufacturing sector was highly capital-intensive because the cost of capital has gone down over the past few decades while the cost of labour has remained more or less the same.
He added that while there wasn't a dramatic increase in involuntary unemployment in the country, voluntary unemployment levels had gone up dramatically.
"People are unwilling to settle for jobs -- particularly having invested in education -- that do not give them a salary above a certain scale," Debroy said.
He added that another reason behind unemployment was the mismatch between the supply of job opportunities and demand for skilled workforce.
"So, I have people from the eastern parts of India saying they are not getting jobs while at the same time, I have people from Punjab, Kerala or Haryana saying they cannot find even a semi-skilled worker," Debroy said.
The NITI Aayog member added that the majority of jobs would be created in service sector, not manufacturing sector.
--IANS
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