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17 million formal sector jobs created by UPA govt offers no employment benefits – The Economic Times

NEW DELHI: The UPA government has generated more jobs in its second innings, but 85% of the 17 million new formal sector jobs created between 2009-10 and 2011-12 offer no employment benefits and social security, according to a new report on India’s labour market from the International Labour Office. In a 10-year report card released ahead of Prime Minister Manmohan Singh’s press meet earlier this month, the government has cited India’s unemployment rate falling from 8.4% in 2004-05 to 5.6% in 2011-12 as one of its biggest achievements. The ILO analysis, however, warns about the sharp dip in the quality of employment opportunities created in UPA-II’s first three years. The trend, according to labour market experts, means that those who got jobs created in recent years are extremely vulnerable to the loss of livelihood in downturns like the current slump in the country’s industrial economy. Warning that the current economic downturn will have a negative impact on the labour market as a consequence of depressed investment and consumer spending, the ILO has said that outcomes in India’s job market have lagged economic trends as reflected by the period of ‘jobless growth’ from 2004-05 to 2009-10. Just 1.1 million jobs were created between 2004-05 and 2009-10, but nearly 14 million jobs were created between 2009-10 and 2011-12. “These trends were puzzling because annual GDP growth averaged 8.5% in between 2004-05 and 2009-10,” said ILO’s senior employment specialist Sher Verick in a December 2013 brief on India’s employment scenario reviewed by ET. While the unemployment rate had indeed shrunk in 2011-12, when the last official survey was done, the economy has been in a downward spiral since then. Growth slipped to a decade-low of 4.96% in 2012-13, with industrial growth touching a two-decade low of 2.1%. The situation has worsened this year, with growth at 4.6% in the first six months and industrial activity shrinking by 0.2% in the first eight months. Informal sector jobs accounted for 90% of India’s workforce till 2000, but engaged only 82.2% by 2011-12 – which, on the surface, suggests that more formal jobs are being created. But that’s not the case. “Most disconcerting is the fact that, while new jobs are being created in the organised sector, most of them are informal since workers do not have access to employment benefits or social security,” said another December 2013 ILO note on India’s labour market, adding that young Indians as well as rural women are having a particularly tough time getting a job. “From 2009-10 to 2011-12, employment in the organised sector increased by 17.2 million. However, 84.9% of this increase was due to a rise in informal work in the organised sector,” the ILO has said, highlighting the poor quality of such jobs as a key labour market challenge for India. A five-year old government plan to ensure that informal workers in the formal sector, who are usually hired on a contractual basis directly or through contractors, get social security and other job benefits on par with regular employees has gone nowhere due to resistance from government departments and PSUs who also rely heavily on such contract workers. The plan was to amend the 1971 Contract Labour Act so that the rising contractualisation of the workforce doesn’t foment industrial unrest due to unequal working conditions and salaries between workers and regular employees.
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