Policies adopted by the government to curb unemployment by Vanshika Chauhan at LEXCLIQ

Swarna Jayanti Shahari Rozgar Yojana (SJSRY) was launched in 1997 for urban poverty alleviation. The target population is the urban poor living below the poverty line. The key objective of the Scheme is to provide gainful employment to the urban unemployed through the setting up of self-employment ventures or provision of wage employment. Studies show that the training programmes for beneficiaries were organized by NGOs and other institutions which were not recommended in the SJSRY guidelines. Thus, it is evident that this policy has been unable to generate the required level of employment due to several drawbacks.

Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) was enacted by the Central Government in 2005, aimed at improving living standards of the rural poor and providing social security to them by giving the adult members of every household at least one hundred days of guaranteed wage employment of unskilled manual work in a financial year. The Act succeeded in generating employment in more than 300 districts since it was launched. In the financial year 2013-14, 3,81,26,455 households provided employment.3 Besides all these achievements there are many issues faced by the government which are related to this scheme. In April 2011, the Central and the State Level revised the policy and concluded that the budget of Rs.40,000 crore could have been utilized more efficiently with effective planning for curbing unemployment. Schedule one of this Act focuses on conservation of natural resources but evidences showed the destruction of natural resources in some areas where contracting was allowed, and machinery were involved. To add on to it, the lack of adequate administration and technical knowhow at Block and Gram Panchayat has adversely affected the preparation of plan, security, appropriate monitoring and measurement of work. With proper implementation of this policy, the rate of employment generation could have been higher as compared to the four-fold increase in the budget for this scheme since 2005.

Ministry of Micro, small and medium enterprises (MSME) is regarded as the engine of economic growth and development. In India it has played a key role in generating job opportunities and promoting self-employment. MSME Act 2006 facilitates the development of both manufacturing and service sector and also enhances their competitiveness. They are spread across the country and boost the manufacturing of many products thus promoting entrepreneurship and provide services to meet the local market needs. It is found that since they have limited financial resources they are unable to hire skilled and specialized workforce. This hinders technological advancement and expansion of the enterprise. Moreover, these industries do not develop the skill set of the employed unskilled workforce thereby keeping their employability low.

National Skill Development Mission was initiated after the Twelfth Five Year Plan emphasized on bridging the skill deficit needed for jobs. This programme aims to skill 500 million people by the year 2022. The Prime Minister’s National Council of Skill Development was set up as an apex organization to frame policies, give directions and provide vocational training in schools. To promote skill development in rural areas, Apprenticeship Training Scheme (ATP), Vocational Training Providers (VTP) and many other programmes were undertaken. Government has also decided to transform Public Employment Exchanges into Career Centers to provide guidance and career counselling to young people. National Multi-Skill programme called Skill India has been launched which focuses mainly on entrepreneurial skill development. The skill challenge becomes acute for India considering that the country has a large portion of its population below 25 years of age. Currently a major proportion of this population is not productively engaged in economic activities due to a ‘skills versus jobs requirement’ mismatch which leads to economically inactive working age group people affecting the economy and increasing unemployment.

Regional Rural Banks (RRBs) were established in 1975 with a view to develop the rural economy and to create a supplementary channel to the ‘Cooperative Credit Structure’ to enlarge institutional credit for the rural and agriculture sector.4 The RRBs mobilize deposits primarily from rural/semi-urban areas and provide loans and advances mostly to the rural inhabitants. RRBs encourage entrepreneurship by giving credits in concessional rates. This increases the sense of security to the new entrepreneurs. RRBs also spruce the rural economy. However, some issues were observed in the implementation of this scheme. There are many restrictions in the credit policies which seemingly discourage the rural population to deal with these banks. These banks also follow strict and complicated procedure in deposits and advancing loans which is difficult for these people to understand and undertake. Thus, the very purpose of employment generation has been compromised.

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