8
S
tate
of
I
ndia
’
s
L
ivelihoods
R
eport
2015
While it is easy to hire and maintain
informal and unorganised sector jobs and
these jobs account for most of the employ-
ment in the country, in terms of gross value
added (GVA), the formal, organised sector
has a much higher share. The Planning
Commission task force for the 12th five
year plan observed, “Unorganised manu-
facturing contributes to 85 per cent of total
manufacturing employment in the Indian
economy, while organised manufacturing’s
contribution is only 15 per cent (2004–05).
On the other hand, for GVA, the contri-
bution of the organised segment is the
exact opposite, that is, 78 per cent, while
the share of the unorganised segment of
manufacturing is 22 per cent of total GVA
inmanufacturing in the economy. Similarly,
in non-manufacturing industry (i.e., gas,
electricity, mining and construction), the
share of the unorganised segment is 69 per
cent in employment but only 32 per cent
in GVA. On the contrary, for GVA, the
contribution of the organised segment is
68 per cent for GVA while the unorganised
segment employs 69 per cent of all workers
engaged in non-manufacturing industry.
For services, the contributions to employ-
ment and GVA of the organised and unor-
ganised segments are very different as well.
Organised services contribute 27 per cent
of all employment in services, but twice as
much to total GVA produced by services in
the economy. Unorganised services, on the
other hand, are very significant in terms of
employment generation (73 per cent of all
services’ sector employment), but contrib-
ute much less (45 per cent) than organised
services (55 per cent) of all service sector
GVA.” The inference is that, creation of
unorganised sector jobs and informal jobs
depends on the prospects of growth in the
sector in which they are situated and can
disappear at the first signs of a downturn.
Skill development is an important part
of government’s strategy for dealing with
creation of employment for the increasing
labour force, increasing productivity for the
employers and for realising the potential of
demographic dividend. But the resources
required to build skills in the projected num-
bers are far too large. The projected demand
for labour in some official documents may
be exaggerated. For the present, the structur-
ing of meaningful curriculum, identifying
good training providers and enhancing their
skills, finding private sector collaborations
for placement in jobs and improving the
environment for microenterprises creation
are the priorities. Over the next two years,
the nature of challenges in skilling for
employability will unfold and that would
be the right time to refine strategies. Private
sector’s involvement in skill building of the
youth has been significant as seen in several
programmes. Skill development offers the
corporates a significant opportunity to fulfil
the CSR mandate recently stipulated.
The government is aware of the mini-
mum needs to keep poverty away and
raise minimum wage levels under its pro-
grammes. The states have followed suit and
raised minimum wages across sectors and
skill levels. Despite such action, the growth
rate in rural wages has registered a decline.
The decline has been almost secular for
about four years now. A comparison with
the CPI shows (Figure 1.4) that it declined
between 2010 and 2012, but again reversed
the trend and started increasing. However,
the wage levels have been on a decline (Figure
1.3). While the
Economic Survey 2014–15
concludes that this will lessen the overall
inflationary pressures in the economy, the
pressure on the fragile incomes of the poor
households should be a matter of concern.
The policies of the State should influ-
ence investments towards sectors where
employment elasticity is high. To encourage
investments in labour intensive industries
and global scale units, the Labour Laws
require a review. The existing Labour Law
framework, while exhaustive and painfully
intrusive, does not protect the interests of
labourers. Investments in labour productivity
are critical. The recent momentum given to
skilling labour is a step in the right direction.
Apart fromskilling labour, issues inContract
