Should jobs come first or skilled workforce?

Rituparna Chakraborty, president of Indian Staffing Federation (ISF), says a million of youth need jobs every month. When you juxtapose this number against the employment being generated in a month, the gap between the two is huge.

As per a recent Associated Chambers of Commerce and Industry of India (Assocham) study, around 8.5 lakh new jobs were created across India in the first quarter of 2016.

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This, despite government initiatives like Make in India, Start up India, and a host of others, which are meant for pushing economic growth and eventually propping up employment figures. On the other hand, Skill India is expected to feed the need of the industry for skilled workforce.

It's almost a chicken and egg dilemma – whether to skill first or create jobs first. Many believe that Skill India, if not backed by new employment opportunities, would only add to India's skilled unemployed.

ISF's Chakraborty is very clear jobs should come first; "If somebody would want me to choose between jobs and skills – which one needs to be fixed first? I would say jobs because job is the last mile. When I know there is a job, even my incentive to get myself skilled exists. Right now, the youth of the country don't see (that). There is no clear line of sight (for that). That's why let's get the jobs first,"

Hans Leentjes, vice-president, ciett, an international association of private employment services, believes with demand for Indian labour no longer being about cost arbitrage, it was important for India to move up the skill ladder.

"You saw (a phase) where a lot of work has been outsourced to India for just cost (of labour). That time is over. I am talking about the next 10 years – there will be demand for skills and educated people. So, if I were in India I would focus on getting the skill and get it (skilled labour) into the formal workforce," he said.

Recently released government job numbers, though, are not very encouraging on fresh jobs front. According to the Labour Bureau, eight of the labour intensive sectors — textiles, garments, leather, jewellery, business outsourcing, handlooms, metals and automobiles – created fewer jobs at 1.3 lakh jobs in 2015 compared with 4.9 lakh jobs in the previous year.

And as jobs dwindle, the number of unemployed is also swelling. As per some estimates, close to 15 million jobs were reportedly created between 2005 and 2012, leaving a backlog of nearly 50 million unemployed youth in those seven years. This situation could get aggravated over the next 10 years when another 80 million people join the workforce.

When asked if enough jobs were being created in the country at the moment, Chakraborty said India had improved on this count over the last two years but it was not "enough".

"I don't think it is enough at this point in time. It's a lot of jobless growth. I would say in the last two years we have improved but I have to submit it may not be enough. So, that's the reason we need to push the labour reforms and manufacturing" she said.

Chakraborty said if the demand gap between demand and supply of workforce had to be bridged then Make in India needed to happen in a big way.

"If you have to close this (gap between and supply). Make in India has to happen and manufacturing has to step up. It's a shame that in a country with this kind of volume, only 12% of the employed are in the manufacturing sector," she said.

Interestingly, today most of the jobs being created are in the south and west of India while the supply was concentrated in north and east of the country.

Nikhil Barshikar – founder and managing director of Imarticus Learning, feels with employability rate of workforce falling it was as important to improve its quality as creating more jobs.

"I don't think it is a chicken and egg situation. If you can train a guy based on what is required then you can successfully get him placed (in a job). When I started my business (2012) the rate of employability of graduates was 15%, it is down to 10%. So, the number (of employability rate) is going down," he said.

But ISF's Chakraborty sees the solution elsewhere. According to her, right now people are going to where the jobs are – south and west – but if the government succeeds in taking jobs to where people are – north and east – through its various programmes, it could solve problems to some extent.

"That is why Make in India is important. It takes the jobs to people. We cannot solve this problem by continually taking people to the jobs," she said.