Note4Students
From UPSC perspective, the following things are important :
Prelims level: Job for Resilience Report
Mains level: Main findings in this report
Why in the News?
Recently, the ‘Job for Resilience Report’ was published by the World Bank. The Report talks about how the South Asia region including India is not making use of its demographic dividend.
- The pace of job creation in the region fell well short of the growth in the working-age population, even as it projected a strong 6.0-6.1% growth for 2024-25 for the region in its South Asia region.’
Main findings in this report:
The South Asia’s labor markets as Emerging markets and developing economies:
- Declining employment ratio: South Asia’s employment weakened from 2000–23, despite a 6% post-pandemic surge. While most EMDEs remained stable, South Asia declined by 2%, with varied changes within.
- Low employment ratios: Except for Nepal, South Asian countries have employment ratios significantly lower than other EMDEs, with South Asia’s ratio at 59%, notably lower than the 70% average elsewhere in 2023.
- Employment weakness for men and women: In South Asia, men’s employment ratios declined over two decades, compared with other EMDEs. Women’s ratios, persistently low and half those elsewhere, primarily contribute to South Asia’s lower overall employment rates.
- A missing engine of growth: In the 2010s, South Asia experienced a surge in labor productivity growth, which later declined below the EMDE average from 2020–23. Unlike other EMDEs, South Asia’s output growth relied heavily on labor productivity growth and working-age population expansion. However, declining employment ratios hampered output growth.
Report on Indian Scenario:
- Trends in employment and labor productivity: India’s employment growth in the 2010s was weak but rebounded post-pandemic. The employment ratio declined significantly until 2022 but partially recovered by 3 percentage points in 2023.
- Migrant workers: In India, Migrant workers returned to rural areas, and emigration from rural areas slowed, during the pandemic.5 India has the region’s second-largest share of workers in agriculture (44 per cent) after Nepal.
- Employment composition: India’s industrial employment grows with public investments, eased labor regulations, and contract labor. The services sector, led by IT, BPO, and healthcare, thrives on a skilled workforce and digital infrastructure, limiting opportunities for unskilled labor.
Measures to address the challenges highlighted in the Report:
- Skill Development Programs: Implementing extensive skill development programs to equip the workforce with the necessary skills demanded by the evolving job market, focusing on both technical and soft skills.
- Labour Market Reforms: Continuously reviewing and refining labor regulations to strike a balance between protecting workers’ rights and fostering a conducive environment for job creation and investment.
- Promotion of Inclusive Growth: Implementing policies aimed at promoting inclusive growth, particularly focusing on increasing women’s participation in the workforce through measures like affordable childcare, flexible work arrangements, and addressing cultural barriers.
- Investment in Infrastructure: Continued investment in infrastructure development to facilitate the growth of industries and services, creating more employment opportunities, particularly in rural areas.
- Enhancing Productivity: Implementing measures to enhance productivity across sectors through technological advancements, innovation, and efficient resource allocation.
Conclusion: World Bank warns South Asia, including India, risks wasting demographic dividend due to declining employment ratios and low productivity growth. Urgent measures needed: skill development, labor reforms, inclusive growth promotion, infrastructure investment, and productivity enhancement.
With inputs from:
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