Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

India needs to create more salaried jobs: World Bank

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Mains Paper 3: Economy | Development & employment

From UPSC perspective, the following things are important:

Prelims level: World Bank, Systematic Country Diagnostic, Demographic dividend, employment-unemployment surveys

Mains level: Rising number of job seekers and low employment opportunities


Draft Systematic Country Diagnostic

  1. India needs to create regular, salaried jobs with growing earnings rather than self-employed ones
  2. This needs to be done in order to join the ranks of the global middle class by 2047—the centenary of its Independence
  3. The World Bank said this in a draft Systematic Country Diagnostic (SCD) for India

About SCD

  1. The SCD is an analytical exercise that the World Bank conducts in all countries
  2. It articulates an analysis of the most important opportunities and challenges to achieving, in that country, the two goals the World Bank Group holds itself accountable for—eliminating extreme poverty and boosting shared prosperity

Demographic dividend may turn into a demographic curse

  1. Between 2005 and 2012, the Indian economy generated about 3 million new jobs per year, while an extra 13 million people entered the working age population each year
  2. There is no recent credible jobs data as India conducts the comprehensive employment-unemployment surveys only once in five years
  3. The World Bank warned that with an increasing number of youths needing employment, the jobs deficit that India faces has the potential to turn the much-awaited demographic dividend into a demographic curse

Reforms in land and labour markets required

  1. The existing stringent labour regulations create a segmented labour market with a high level of protection for a very small fraction of workers in jobs
  2. It creates high barriers for the entry of other workers into the protected segment of the formal labour market
  3. Flexible labour markets that facilitate the reallocation of workers in response to market conditions are important for productivity and job growth
  4. Well-functioning land markets require clearly defined property rights, a reliable land registry, and predictable processes for investment and changes in land-use
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