CII Summit | Bringing people who lost jobs back into formal sector remains big challenge: India Inc

Worker with cartons of fabric at a textile market in Surat. (PC-NYT) File Photo.

Bringing back the people who have been forced to move out of the formal sector owing to job losses during Covid is currently one of the biggest challenges the country faces, India Inc believes.

"Unfortunately, not only have a lot of people lost jobs, but a very large section of our population have been forced to move from the formal to the informal sector. Nearly 50 percent of the formal salaried class has had to move towards being self employed or go towards casual labour. To bring this workforce back is a massive challenge," Aditya Ghosh, the Co-Founder of Akasa Airlines has said.

Ghosh was speaking at an industry dialogue session at the CII Global Economic Policy Summit 2021. "We need something like 100 million jobs over the next 10 years. That means, the non-agricultural sector has to deliver 14 percent job growth every year for the next decade. I also need to humbly say that the service sector will not be able to solve this challenge on its own," he said.

The last 20-24 months is a blip and nothing fundamentally changed for India and the opportunity it provides, Ghosh said, stressing that there is still a lot of demand, very little supply, and huge room for growth.

Ghosh's views were supported by Naushad Forbes, Co-Chairman, Forbes Marshall Private Limited and past President of CII said. "About 86 percent of India's total labour force is informally employed. It has the advantage of great flexibility but the disadvantage of not affording any protection to those employed," Forbes said.

CII has identified that moving people who are unemployed and underemployed into productive occupations remains India's biggest challenge.

Demand mapping needed

The demand mapping for jobs needs to be one specifically for a large nation like India, Preetha Reddy, Executive Vice Chairperson, Apollo Hospitals Group, said. "Data shows we need 14 million Indian healthcare professionals, while the global estimate is 80 million. We have a growing ageing population and this number is actually double of what we can currently garner," Reddy said.

India has 30 million manufacturing jobs, out of total employed members of 400 million. While this 30 million is a low number, this matches the number of people who are employed as barbers, maids and other 'personal non-professional services'. On the other hand, retail consists of 70 million people.

"Tourism is now again booming, and we expect international travel to come back in the next 3-4 month. One thing is proven after all crises, that tourism has always come back stronger than before the crisis," Puneet Chhatwal, Managing Director & CEO, The Indian Hotels Company Limited and Chairman of the CII National Committee on Tourism & Hospitality said.

Before Covid hit, 25 percent of all jobs globally were in tourism. "In most of the advanced, mature economies, tourism is given a lot more importance. We are slowly getting there,' Chhatwal said.

Employment challenges

"The labour force participation rate is 40 percent, mainly due to very low female labour force participation of just 21 percent. This is the lowest among the G20 economies, even trailing Saudi Arabia. The number of women who have moved out of formal employment is 3 and a half times that of men.

"Economists have predicted if female labour force participation matched that of men, India would be 60 percent richer," Forbes said. The lack of jobs tailored for women is a prime reason behind this, apart from social attitudes, he added.

Around 15 months ago, the government passed a new set of labour laws incorporating 4 new labour laws that replaced 44 earlier laws. But these are still pending official release by the Central government to be further implemented by the state governments.