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Employment Status India, Labour Reforms and Related Schemes

Employment Status India

Problems – Unemployment + Underemployment + Low labour force participation of women + Voluntary unemployment + Disguise unemployment

Underemployment - The condition in which people in a labor force are employed at less than full-time or regular jobs or at jobs inadequate with respect to their training or economic needs

Agriculture - 45.7% of India’s workforce (largest source of employment)

NITI Ayog – voluntary unemployment is rising because people choose not to work below a certain income level after ‘investing’ in education.
Economic Survey 2017 states that
  • Shift in employment to secondary and tertiary sectors from the primary sector
  • Reflects increase in both casual labour and contract workers – ‘temporary’ nature of employment
  • Preference by employers away from regular/formal employment to circumvent labour laws


Job Creation

Demographic dividend is expected to last for 25 years, to reap the benefits of this India will need to create 12-15 million non-agricultural jobs per year.

How to create – Steps
  • Make in India campaign, Start-Up India (making job-seekers into job-creators)
  • Quality of physical infrastructure and the ease of doing business via simplifying labour laws
  • Government needs to create formal-sector jobs so that disguised unemployment in agriculture can be shifted towards more labour-intensive goods and services sectors
  • Life-long learning (multiplicity of skills with regular updation) and social security systems
  • Creation of Coastal Employment Zones, which may attract multinational firms in labour-intensive sectors from China to India
  • Mckinsey report suggests three ways to create opportunities for more gainful employment –
  • More appropriate statistical measurement of employment
  • Targeted government programmes
  • Building industrial townships & focusing on manufacturing
  • Niti Ayog – Government should create a diversity of jobs for utilizing voluntary unemployed


Labour Reforms by the Government 

  • Maternity Benefit (Amendment) Bill, 2016 – increased maternity leave from 12 to 26 weeks + Creche
  • Child Labour (Prohibition and Regulation) Amendment Bill, 2016 – complete ban on employment of children below 14 years + more stringent punishments
  • Payment of Wages (Amendment) Bill, 2016: enable the Centre and state governments to specify industrial units which will have to pay wages only either through cheques or by transferring into bank accounts
  • Pradhan Mantri Rojgar Protsahan Yojana: to incentivise employers for generation of new employment
  • Modal shops and establishment bill 2016 especially for Women: work night shifts with adequate safety and other basic facilities
  • Shram Suvidha Portal for transparent Labour Inspection, Unique Labour Identification Number, Universal Account Number, Online Registration of Establishments
  • National Career Service Project: brings together job seekers, employers and other stakeholders on a common platform


Government Schemes 

Startup is an entity, incorporated or registered in India – Not prior to 7 years, annual turnover not exceeding INR 25 cr in any preceding financial year, working towards innovation with a high potential of employment generation or wealth creation.

Startup India
  • Eco-system for nurturing innovation
  • Will drive economic growth and generate large-scale employment opportunities
  • Self certification + hassle free registration
  • No labour inspection for 3 years
  • Funding support worth 10000 cr via funds of fund
  • 80% rebate on patent applications
  • Income tax relief for 3 years
  • Exempted from CGT
  • Incubation centers for handholding approach across the country


  • National Initiative for Developing and Harnessing Innovations
  • To support and award INR 10 lakhs to 20 student innovations


ATAL Innovation Mission 
  • a platform for the promotion of Innovation Hubs for startup businesses and other self-employment activities
  • focused on technology-driven areas Entrepreneurship promotion through Self-Employment and Talent Utilisation (SETU)


Standup India Scheme 
  • To promote entrepreneurship among SC/ST and Women entrepreneurs
  • intended to facilitate at least two such projects per bank branch
Deen Dayal Upadhyay Swaniyojan Yojana – by Ministry of Rural Development to promote rural entrepreneurship under Start-Up India campaign, funded by NRLM

National SC/ST Hub to provide professional support to entrepreneurs from the SC/ST

Zero Defect – Zero Effect Scheme – aims to rate and handheld all MSMEs to deliver top quality products using clean technology

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