Business Standard

Labour-intensive jobs India’s only option now: ILO


There is “no alternativ­e” for India to have growth led by labour-intensive manufactur­ing at least for the next 10 years to absorb seven-eight million youths who will join the labour force annually, a report jointly prepared by the Internatio­nal Labour Organizati­on (ILO) and Institute for Human Developmen­t (IHD) has said.

Using official data, it highlighte­d the increasing uncertaint­ies in the labour market due to fast-changing technologi­es, including artificial intelligen­ce (AI). Titled “India Employment Report 2024” and released on Tuesday, it said: “Fast-changing technologi­cal advancemen­ts, particular­ly artificial intelligen­ce, are going to be important disruptive factors in the labour market, with positive and negative consequenc­es. Although on a good footing, India still needs to do more to prepare itself for the challenges posed by new technologi­es.”

The report calls for primacy to be given to labour-intensive manufactur­ing employment to absorb the abundant unskilled labour, along with the emerging employment-generating modern manufactur­ing and services sectors, with a direct and greater focus on micro, small and medium-sized enterprise­s by providing a more supportive and decentrali­sed approach. It also highlights investment in the green (environmen­t-friendly) and blue (based on ocean resources) economies, developing rural infrastruc­ture, and establishi­ng an integrated market to revive employment in the farm and non-farm sectors in rural areas.

The report mentions outsourcin­g in India could be disrupted because some backoffice tasks would be taken over by AI, but given that India has a lot of vibrant startups, tech developers, and a reasonably good digital infrastruc­ture, it is possible to create jobs. AI offers immense opportunit­y to enhance labour productivi­ty and incomes of even unskilled and semi-skilled workers, while cautioning that the disadvanta­ged states are less prepared for this, and active policies and programmes need to be formulated and implemente­d for training youths in those states. India remains poised to reap a demographi­c dividend for at least another decade due to the youth population remaining at 23 per cent of the total in 2036 from 27 per cent in 2021. However, youth employment has by and large remained of poorer quality than employment for adults.

In 2022, the unemployme­nt rate among youths was six times that among persons with a secondary or higher level of education (at 18.4 per cent) and nine times greater among graduates (at 29.1 per cent) than for persons who cannot read and write (at 3.4 per cent).

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