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Job Creation in Urban India: A Note for discussion

Job Creation in Urban India: A Note for discussion. K.V.Ramaswamy Indira Gandhi Institute of Development Research, Mumbai. Importance of Urban India. Urban population grew by 2.76 percent per annum in the decade 2001-2011.

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Job Creation in Urban India: A Note for discussion

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  1. Job Creation in Urban India: A Note for discussion K.V.Ramaswamy Indira Gandhi Institute of Development Research, Mumbai

  2. Importance of Urban India • Urban population grew by 2.76 percent per annum in the decade 2001-2011. • Its share in total population increased to 31.1 percent in 2011 from 27.8 percent in 2001 • Little less than 50 percent of the jobs created in India is accounted for by urban India over the period 1999-2009. • More than 85 percent of the jobs created in business services and more than 80 percent in manufacturing were in the urban sector Berkeley-Bengaluru

  3. Who is creating jobs in Urban India? • Construction is the fastest growing sector with a share of 10 percent of total urban employment • Transport, Communications and Other business services together take the second place • Manufacturing occupies the third place in terms of jobs growth. Its share in total urban employment is 23 percent • Other business services include real estate, financial services, IT and IT enabled services and social and community services Berkeley-Bengaluru

  4. What type of urban jobs? • Nearly 80 percent of all urban workers are in informal employment broadly defined to include both self employment and wage employment (casual wage + regular wage) • Manufacturing, non-trade services and construction dominate urban informal employment Berkeley-Bengaluru

  5. Education-skill composition? • Services sector has greater proportion (61%) of workers with secondary education and above • Manufacturing 54 % of the workers were having below secondary education • Construction is dominated by casual workers with below primary education. It is expected to create highest incremental casual employment up to 2022 Berkeley-Bengaluru

  6. Development of skilled workforce • Construction industry requires a large number of carpenters, masons, plumbers and construction machine operators • Manufacturing requires a wide variety of industry specific skills and technicians in garments, textiles and auto-component industries etc • Services face of shortage of skilled professionals Berkeley-Bengaluru

  7. Current State of Vocational Education (VET) • In the age-group 15-29 the proportion of population having formal vocational education has declined to 2% in 2009 from 2.4% in 2004 • Proportion with non-formal VET has declined to 4.8% in 2009 from 7.7% in 2009 • It has declined in absolute terms as well Berkeley-Bengaluru

  8. Unemployment among VET • Unemployment rate among persons with formal vocational training is 24% • Whether the vocational training was ever helpful in getting a job? (NNS 66th round) • 29% of the individuals said they have not benefitted from training • Is there a mismatch? • VET for informal sector? Berkeley-Bengaluru

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  11. Incentive for firms to hire apprentices/trainees? • The Apprentice Act, enacted in 1961, regulates the program of training apprentices in the industry • Labor Ministry initially suggested that companies should absorb 50% of the trainees that they hire later backtracked to suggest preference should be given to them Berkeley-Bengaluru

  12. Flawed VET system? • VET for informal sector workers? • Entry barriers? • Minimum secondary school education (class VIII and Class X) is a prerequisite for enrolling in craft and apprenticeship schemes for construction-related training.. • Duration…. • Issue of private participation.. Berkeley-Bengaluru

  13. References • Ramaswamy and Agrawal (2012):Chapter-8, India Development Report, M.Dev(Ed) • Ruchi Hajela (2012): “Shortage of skilled workers: a Paradox of the Indian Economy”, SKOPE research paper No.111 • Tushar Agrawal (forthcoming):Skill development in India: an examination”, Journal of education and work Berkely-Bengaluru

  14. Thank you Berkely-Bengaluru

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