India needs to create more salaried jobs: World Bank

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


• The bank said in a society with wide inequalities, the most urgent priority is to create productive, regular jobs.
• The World Bank said in a first-of-its-kind draft report published on its website that the issue is not just the number of jobs but also the type of jobs. A transition into the middle class calls for the creation of salaried jobs, which is a rare privilege in India today where less than a fifth of workers are in salaried employment.
• India has been classed a lower-middle income country for a decade and aspires to move a step up in the global prosperity ladder.
• Globally, low-income countries are those with real per capita GDP less than 5% of that in the US in purchasing power parity (PPP) terms; lower-middle income countries are those with 5-15% per capita incomes of that in the US; and upper-middle income countries are those with 15-35% per capita incomes of that in the US. High-income countries are those above that line, including some even above the US’ income level.
• The Economic Survey 2017-18 said if per capita income in India grows at 6.5% per year, India will reach upper-middle income status by the mid-to-late 2020s.
• India attained lower middle-income status in 2008 and today has a per capita income of $6,538 (in 2011 PPP terms), which is 12% of the US. In 1960, India was a low income country with a per capita income (in PPP terms) of $1,033. This was equivalent to about 6% of US per capita income at the time.
• The SCD is an analytical exercise that the World Bank conducts in all countries. It articulates, from the perspective of the World Bank Group, an analysis of the most important opportunities and challenges to achieving, in that country, the two goals the Group holds itself accountable for—eliminating extreme poverty and boosting shared prosperity.
• 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.
• A growth strategy that focuses on productivity-led economic growth and good jobs will ensure not only that growth is inclusive but that growth is sustainable.
• 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. There is no recent credible jobs data as India conducts the comprehensive employment-unemployment surveys only once in five years. A recent claim in a State Bank of India report—based on data from the Employees’ Provident Fund Organization (EPFO)—that the economy generated 7 million jobs last year, has been contested by many economists.
• The World Bank said reforms in land and labour markets in India would pay high dividends and help unshackle Indian businesses. “Well-functioning land markets require clearly defined property rights, a reliable land registry, and predictable processes for investment and changes in land-use. Flexible labour markets that facilitate the reallocation of workers in response to market conditions are important for productivity and job growth
• 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 and high barriers for the entry of other workers into the protected segment of the formal labour market, the bank said.

Causes for jobless growth in India


• 70%population engaged in the primary sector contributing only 14% of GDPGDP, More focus on services which is less service intensive
• Agriculture becoming nonviable due to low MSP, climate change, food wastage, decrease in the size of the landholdings.
• Lack of education and skill development Patriarchal development, Patriarchal society leading the women confined to the homes
• More focus on theoretical aspects of learning which do not match with market-needs Lack of social security and special facilities for women at the workplace
• Lack of coverage of financial inclusion, optical fiber and technology penetration- Automation and use of technology also lead to unemployment sometimes.
• Lack of internet facilities and computer centers in rural areas leading to dependence on the traditional agriculture practices only as the source of income.

Q.Which of the following schemes are specially designed for job creation in India

1) Skill Development Programme

Choose the correct answer from the above
a) 1 only
b) 1 and 2 only
c) 1 and 3only
d) All of the above

Answer: d) all of the above

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