Day 18 Mains Questions – Ace Answer Writing Program

Question 1: Despite high economic growth, India faces persistent challenges in job creation. Critically examine the reasons for this ‘jobless growth’ and suggest measures to promote employment-intensive growth. (10 Marks, 150 words)

Introduction

Despite India’s impressive economic growth, the country faces a ‘jobless growth’ scenario where the GDP rises, but employment opportunities do not keep pace. This phenomenon raises concerns about inclusive development and equitable distribution of wealth.

Body

Reasons for ‘Jobless Growth’ –

1. Technological Advancements: Increased automation reduces the need for human labor in manufacturing. Example: Robotics in automobile production.
2. Sectoral Growth Imbalance: High growth in capital-intensive sectors rather than labor-intensive ones. Example: IT and finance sectors versus textile and agriculture.
3. Skill Mismatch: Education and training systems not aligned with industry requirements. Example: Graduates lacking practical skills for technical jobs.
4. Regulatory Hurdles: Complex labor laws discourage hiring. Example: Rigid labor regulations in formal sectors.
5. Informal Sector Dominance: A large part of the workforce is engaged in low-productivity informal jobs. Example: Street vendors and casual laborers.

Measures to Promote Employment-Intensive Growth –

1. Skill Development Initiatives: Align education and vocational training with industry needs. Example: Pradhan Mantri Kaushal Vikas Yojana (PMKVY).
2. Promoting MSMEs: Encourage growth of micro, small, and medium enterprises which are labor-intensive. Example: Credit schemes for small businesses.
3. Labor Law Reforms: Simplify and rationalize labor laws to encourage formal sector employment. Example: The Code on Wages, 2019.
4. Incentivizing Labor-Intensive Industries: Provide incentives for industries that generate more jobs. Example: Tax benefits for textile and handicraft sectors.
5. Enhancing Social Security: Improve social security nets to support informal workers transitioning to formal employment. Example: Atal Pension Yojana.

Conclusion

Addressing the issue of jobless growth requires comprehensive strategies that encompass skill development, labor reforms, and promotion of labor-intensive sectors. These measures are essential for ensuring inclusive growth and sustainable economic development.

Question 2: Evaluate the effectiveness of India’s skill development initiatives in addressing the challenges of employability and inclusive growth. What reforms are needed to bridge the skill gap? (10 Marks, 150 words)

Introduction

India’s skill development initiatives aim to enhance employability and promote inclusive growth by providing vocational training and skill enhancement. Programs like Pradhan Mantri Kaushal Vikas Yojana (PMKVY) target these objectives.

Body

Effectiveness of Skill Development Initiatives –

1. Increased Enrolment: Significant increase in enrollment for vocational training. Example: Over 10 million enrollments under PMKVY.
2. Diverse Training Programs: Wide range of sectors and skills covered. Example: Courses in IT, healthcare, and construction.
3. Public-Private Partnerships: Collaboration with industry to ensure relevant training. Example: Tie-ups with companies like Infosys for IT training.
4. Improved Certification: Standardized certification to enhance credibility. Example: NSDC certification recognized by employers.
5. Focus on Marginalized Groups: Special initiatives for women and disadvantaged communities. Example: Training programs for rural women in tailoring.

Reforms Needed to Bridge the Skill Gap –

1. Industry Alignment: Align training programs with current industry demands. Example: Regular industry feedback mechanisms.
2. Enhanced Quality: Improve training quality through better infrastructure and trainers. Example: Upgrading ITIs with modern equipment.
3. Regional Focus: Tailor programs to regional economic activities. Example: Marine training in coastal areas.
4. Technology Integration: Use of digital platforms for broader reach and efficiency. Example: E-learning modules for remote areas.
5. Monitoring and Evaluation: Regular assessment and feedback for continuous improvement. Example: Tracking employment outcomes of trainees.

Conclusion

India’s skill development initiatives have made significant strides in enhancing employability and promoting inclusive growth. However, aligning programs with industry needs, improving quality, and leveraging technology are essential to bridging the skill gap and ensuring sustainable development.

Question 3: Analyse the role of the informal sector in India’s economy and its impact on inclusive growth. How can policy interventions address the challenges faced by this sector while promoting formalization? (15 Marks, 250 words)

Introduction

The informal sector, comprising over 80% of India’s workforce, plays a crucial role in the economy by contributing significantly to employment and GDP. However, it poses challenges for inclusive growth due to its unregulated nature.

Body

Role of the Informal Sector –

1. Employment Generation: Provides jobs to a large portion of the population, especially in rural areas. Example: Agricultural laborers, street vendors.
2. Economic Contribution: Contributes significantly to GDP through various unregistered activities. Example: Small-scale manufacturing, construction work.
3. Flexibility and Resilience: Adapts quickly to economic changes and provides a buffer during downturns. Example: Gig economy workers like delivery personnel.
4. Entrepreneurial Activity: Fosters entrepreneurship among low-income groups without formal sector barriers. Example: Micro and small enterprises.
5. Regional Development: Promotes economic activity in underdeveloped regions. Example: Handicraft and artisanal work in rural areas.

Challenges Faced by the Informal Sector –

1. Lack of Social Security: Absence of benefits like health insurance and pension. Example: Daily wage workers with no job security.
2. Limited Access to Credit: Difficulty in obtaining formal financing due to lack of collateral. Example: Small vendors relying on informal lenders.
3. Regulatory Hurdles: Complex regulations deter formalization and compliance. Example: Stringent labor laws.
4. Skill Deficits: Low levels of skill development and training opportunities. Example: Unskilled construction labor.
5. Income Instability: Irregular and unpredictable earnings. Example: Seasonal agricultural workers.

Policy Interventions for Addressing Challenges –

1. Social Security Schemes: Implement comprehensive social security for informal workers. Example: Atal Pension Yojana, health insurance schemes.
2. Access to Credit: Simplify access to credit through microfinance and small business loans. Example: Mudra Yojana providing collateral-free loans.
3. Regulatory Simplification: Streamline and simplify regulations to encourage formalization. Example: Single-window clearance systems for small businesses.
4. Skill Development Programs: Enhance skill training tailored to informal sector needs. Example: Skill India Mission targeting informal sector workers.
5. Income Support and Stability: Provide income support during economic downturns. Example: Direct benefit transfers during the COVID-19 pandemic.

Conclusion

The informal sector is a vital component of India’s economy, driving employment and economic activity. Effective policy interventions focusing on social security, access to credit, regulatory simplification, and skill development can address the challenges faced by this sector while promoting formalization. These measures are essential for achieving inclusive and sustainable growth.