6. (c) Why is a National Employment Policy necessary for India? What are the initiatives taken by the Government to facilitate employment generation? Explain.

Why a National Employment Policy is Necessary for India

A National Employment Policy (NEP) is indispensable for India to navigate its unique demographic and economic landscape, ensuring that economic growth translates into widespread and sustainable employment. The necessity stems from several critical factors:

• Demographic Dividend: India has one of the world's largest young populations, with millions entering the workforce annually. Without a coherent policy, this demographic dividend risks becoming a demographic disaster, leading to widespread youth unemployment and social unrest. For instance, the youth unemployment rate (15-29 years) was 10.2% in 2023-24 (PLFS).
• Structural Transformation: The Indian economy is undergoing structural changes, moving from agriculture towards manufacturing and services. An NEP is needed to manage this transition, ensuring that the workforce is equipped with the skills required by emerging sectors and that job creation in non-farm sectors is robust and remunerative.
• Skill Mismatch: A significant gap exists between the skills possessed by the workforce and those demanded by industries. An NEP can bridge this gap by aligning education, training, and skill development programs with market needs, fostering a culture of lifelong learning. The ILO and IHD report (2024) highlighted that two-thirds of India's unemployed youth are educated, indicating a severe skill mismatch.
• Informal Sector Dominance: A large portion of India's workforce is engaged in the informal, unorganised sector, characterized by low wages, lack of social security, and poor working conditions. An NEP can facilitate the formalization of the economy, extending social protection and decent work conditions to these workers. Vulnerable employment among women was 79.6% and among men was 70.1% in India for 2023 (World Bank).
• Inclusivity and Equity: Employment challenges often disproportionately affect vulnerable groups, including women, Scheduled Castes, Scheduled Tribes, and persons with disabilities. A national policy can ensure inclusive growth by creating targeted interventions and addressing barriers to participation for these groups. Female labor force participation rate in India was 41.7% in 2023-24 (PLFS), indicating significant scope for improvement.
• Technological Disruption: Automation, Artificial Intelligence, and other advanced technologies are rapidly transforming the nature of work, creating new opportunities while displacing traditional jobs. An NEP can proactively prepare the workforce for these changes through reskilling and upskilling initiatives.
• Fragmented Efforts: In the absence of a unified policy, employment generation efforts often remain fragmented across various ministries and departments. An NEP provides a holistic framework for coordination, convergence, and effective monitoring of these initiatives.

Government Initiatives to Facilitate Employment Generation

The Government of India has undertaken numerous initiatives across various sectors to boost employment generation and enhance employability:

1. Skill Development and Employability Enhancement

• Skill India Mission (2015): This overarching mission aims to create a skilled workforce. Under it, several programs have been launched:
  • Pradhan Mantri Kaushal Vikas Yojana (PMKVY): Provides industry-relevant skill training to youth to enhance their employability. PMKVY 4.0 (announced in Budget 2023-24) focuses on new-age courses like AI, robotics, and IoT.
  • National Apprenticeship Promotion Scheme (NAPS): Promotes apprenticeships in various industries to provide on-the-job training.
  • Jan Shikshan Sansthan (JSS): Provides vocational skills to non-literates, neo-literates, and school dropouts in rural and urban areas.
  • Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY): Aims at transforming rural poor youth into an economically independent and globally relevant workforce.
  • Skill India Digital Hub (SIDH): An online platform offering free courses, skill development schemes, and job/apprenticeship opportunities across various sectors.
• National Career Service (NCS) Project: A digital platform launched in 2015 that connects job seekers with employers, provides career counseling, and offers skill training resources.
• PM-DAKSH (Pradhan Mantri Dakshta Aur Kushalta Sampann Hitgrahi Yojana): A scheme by the Ministry of Social Justice & Empowerment for skilling marginalized groups like SCs, OBCs, EWS, DNTs, Safai Mitras, and Waste Pickers.

2. Promoting Entrepreneurship and Self-Employment

• Startup India Initiative (2016): Aims to build a strong ecosystem for nurturing innovation and startups, thereby generating employment. As of 2024, it has created 15.5 lakh direct jobs. The initiative supports startups with seed funding, venture capital access, and exemptions in government tenders.
• Make in India (2014): Encourages domestic and foreign companies to manufacture in India, boosting the manufacturing sector and creating millions of jobs across various sectors like automotive, electronics, and textiles. Manufacturing jobs grew by 200% from 2022 to 2024.
• Pradhan Mantri Mudra Yojana (PMMY): Provides collateral-free loans to micro and small enterprises in the non-corporate, non-farm sector, fostering entrepreneurship and self-employment.
• Pradhan Mantri Employment Generation Programme (PMEGP): A credit-linked subsidy scheme for establishing new micro-enterprises in both rural and urban areas.
• Stand-Up India Scheme (2016): Facilitates bank loans between Rs. 10 lakh and Rs. 1 crore to Scheduled Caste/Tribe borrowers and women entrepreneurs for setting up greenfield enterprises.

3. Direct Employment and Wage Support

• Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) (2005): Guarantees 100 days of wage employment in a financial year to adult members of any rural household willing to do unskilled manual work. It acts as a crucial social safety net and direct employment source in rural areas.
• Atmanirbhar Bharat Rozgar Yojana (ABRY) (2020): Launched to incentivize businesses to create new jobs by covering employee and employer contributions to the Employee Provident Fund (EPF) for newly hired workers, especially during the COVID-19 pandemic.
• Employment Linked Incentive (ELI) Scheme (2025): Approved with an allocation of ₹99,446 crore, this scheme aims to support employment generation primarily in the manufacturing sector. It provides incentives to employers for creating additional jobs and offers one month's wage to first-time employees.

4. Sector-Specific and Other Initiatives

• Production Linked Incentive (PLI) Schemes: Introduced across 14 key sectors to boost domestic manufacturing, attract investment, and create jobs. Sectors include mobile manufacturing, automobiles, pharmaceuticals, and textiles.
• Support for Micro, Small, and Medium Enterprises (MSMEs): MSMEs are the second-largest employer after agriculture, contributing 62% to total employment and around 30% to India's GDP. Government provides various support measures, including easier credit access, technology upgradation, and market linkages.
• Labour Code Reforms: New Labour Codes aim to simplify and rationalize labor laws, enhancing ease of doing business for enterprises while ensuring worker welfare and social security, potentially boosting formal employment.
• National Education Policy (NEP) 2020: Emphasizes vocational education and skill integration from school level to higher education to make students more employable.

These initiatives collectively aim to address the multifaceted challenges of unemployment and underemployment by fostering a conducive environment for job creation, skill development, and entrepreneurship across India's diverse economic landscape.