Transcript Job Creation in Urban India

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.
• 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
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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
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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
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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
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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
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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
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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?
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Employment Growth Rates by Sector in Urban India: 1993-94 to 2009-10
1999-00 over
1993-94
2009-10 over
1999-00
2009-10 over
1993-94
Agriculture
-3.4
1.1
-0.6
Mining & Quarrying
-3.7
0.2
-1.3
Manufacturing
1.6
2.8
2.4
Electricity, water, etc.
-4.2
2.1
-0.3
Construction
6.3
5.3
5.7
Trade (Retail+ Wholesale),
Hotel and Restaurant
8.0
1.6
4.0
3.9
2.7
3.2
-0.7
3.4
1.8
Above Three Services
3.4
2.5
2.9
All Sectors
2.3
2.7
2.6
Sector
Transport, Storage and Communications
Other Services like Financial, Business,
Public Administration, Education etc
Source: NSS Employment and Unemployment Surveys adjusted for population censuses. Employment is measured
by number of workers by UPS Status.
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Structure of Urban Employment by Industry
Industry
1999-2000
2009-2010
Agriculture
8.7
7.5
Mining
0.8
0.6
Electricity
0.7
0.6
Construction
7.9
10.2
Manufacturing
22.7
23.0
Trade, Hotels and Restaurant
26.9
24.2
Transport, Storage, Communication
8.7
8.7
Other Services like Financial, business etc
23.5
25.2
Above Three Services
59.2
58.1
All Workers
100.0
100.0
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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
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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..
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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
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Thank you
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