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The Hindu Editorial

9-March-2024

1. India’s suboptimal use of its labour power

Topic: GS3 – Indian Economy – Issues related to development and employment
Critical for UPSC as it delves into India’s labour dynamics, highlighting nuances beyond GDP, crucial for holistic economic understanding.
Context
  • This article critically examines the recent improvements in India’s labour market, revealing a concerning trend of growth in low-quality self-employment and stagnant earnings.
  • The scenario poses challenges to sustained economic development and the utilization of the demographic dividend.
 Introduction:
  • The majority of Indians rely on labour for income, with 90% engaged in informal employment lacking job security and benefits.
  • GDP growth headlines often overshadow the critical factor of labour market dynamics in determining the well-being of the masses.
Improvements in Labour Force Participation:
  • The Labour Force Participation Rate (LFPR) has increased from 52.35% in 2017-18 to 58.35% in 2021-22, mainly driven by rural women.
  • Overall unemployment rates have declined, from 6.2% in 2017-18 to 4.2% in 2021-22, with a similar trend for youth unemployment.
Composition of Employment Types:
  • A deeper analysis reveals that the rise in LFPR and the drop in unemployment are predominantly attributed to the growth in self-employment.
  • Within self-employment, unpaid family workers have significantly increased from 26% to 31.4%, surpassing the marginal rise in employer-driven self-employment.
  • Own-account workers, such as small business owners or street vendors, constitute nearly 35% of the employed population.
Quality of Jobs and Workforce Composition:
  • The proportion of regular wage/salaried employees, casual labourers, and employers has decreased between 2017-18 and 2021-22.
  • The most significant rise in employment is seen in unpaid family labour and own-account workers, signalling a potential decline in job quality.
  • This shift reflects a worrisome trend in the nature of work, emphasising the precariousness of the informal employment sector.
Earnings Scenario:
  • The overall average real daily earnings increased by approximately ₹10 (4%) between 2017-18 and 2021-22.
  • Both rural and urban daily earnings experienced a slight increase, with wage and salaried workers having the highest average earnings, followed by the self-employed and casual workers.
  • Despite the increase, average earnings for the self-employed and salaried workers stagnated in real terms.
  • Casual workers saw a notable 20% increase in daily earnings, but their monthly income remains close to or just above the poverty line.
Concerns for Economic Growth and Demographic Dividend:
  • The rise in LFPR and the decline in unemployment, while seemingly positive, are overshadowed by the predominant growth in low-quality self-employment.
  • More than three-quarters of the employed population engages in low-productivity work, impacting the potential benefits of India’s demographic dividend.
  • Stagnant earnings, especially for the poorer sections, may hinder consumer expenditure, contributing to a potential economic downturn.
Conclusion:
  • While some headline economic indicators show positive trends, a closer examination of the labour market reveals concerns about job quality, earnings, and their impact on economic growth.
  • Addressing the challenges in the composition of employment and the quality of work is crucial for sustaining a positive trajectory in India’s economic development.
India’s suboptimal use of its labour power and impact on demographic dividend
  • Population Growth: India has a rapidly growing population, with a significant portion being the youth. However, this demographic dividend can turn into a liability if not harnessed effectively.
  • Educational Disparities: Disparities in education and skill development hinder the optimal utilization of the labour force. A large section of the population lacks access to quality education and vocational training.
  • Informal Economy Dominance: A substantial part of India’s workforce is engaged in the informal sector, characterized by low productivity and job insecurity. This hampers the overall economic output and the potential benefits of the demographic dividend.
  • Underemployment: Many educated and skilled individuals end up in jobs that do not fully utilize their capabilities, leading to underemployment. This results in a loss of productivity and potential economic growth.
  • Gender Disparities: Gender imbalances in the workforce limit the contribution of women to the economy. Addressing these disparities could significantly enhance the overall labour force and economic productivity.
  • Policy Challenges: Inconsistent policies and inadequate infrastructure further impede the efficient use of labour. A cohesive and well-implemented policy framework is essential to channel the demographic dividend towards economic development.
  • Global Competition: With increasing globalization, India faces competition in the global market. To leverage its demographic advantage, India needs to enhance its workforce’s skills and adaptability to meet international standards.
In conclusion, India’s suboptimal use of its labour power stems from educational disparities, dominance of the informal economy, underemployment, gender imbalances, policy challenges, and global competition. Addressing these issues is crucial for unlocking the full potential of the demographic dividend and ensuring sustainable economic growth.
PYQ: Economic growth in the recent past has been led by increase in labour productivity. Explain this statement. Suggest the growth pattern that will lead to creation of more jobs without compromising labour productivity. (UPSC CSE (M) GS-3 2022) (250 Words /15 marks)
Practice Question:  Critically examine the recent trends in India’s labour market (2017-18 to 2021-22). Analyse the implications of these trends for inclusive growth and India’s demographic dividend. (250 Words /15 marks)

2. Gender equality as the plank of sustainable development

Topic: GS2 – Social Justice – Vulnerable Sections Crucial for UPSC: Links gender equality, energy sustainability, and SDGs, reflecting interconnected global challenges and policy imperatives.
Context
  • The article highlights the often-overlooked intersection between gender equality and sustainable energy development.
  • It emphasizes the essential role of women in energy, addresses disparities, and advocates for collaborative efforts to integrate gender equality into energy policies for a more inclusive and sustainable world.
 Introduction:
  • Ongoing discussions emphasize gender equality and women’s empowerment as crucial societal goals.
  • The intersection between gender equality and sustainable energy development is often overlooked but plays a pivotal role in achieving Sustainable Development Goals (SDGs).
Interconnected SDGs:
  • SDG5 (gender equality), SDG7 (clean, affordable energy), and SDG12 (climate action) are interlinked, highlighting the integral role of gender equality in sustainable development.
Role of Women in Energy:
  • Women significantly contribute to energy access, production, and consumption.
  • Barriers limit women’s participation in the energy sector, hindering economic growth and environmental sustainability.
Energy Access Disparities:
  • Women often manage household energy, but energy infrastructure tends to reach them last.
  • Lack of access to modern energy forces reliance on harmful alternatives, contributing to health risks and perpetuating energy poverty.
Health Impacts:
  • Household air pollution from traditional energy sources leads to 3.2 million premature deaths annually, with 60% affecting women and children (World Health Organization).
Gender Disparity in the Energy Sector:
  • The energy sector remains one of the least gender-diverse, with women constituting 32% in renewables and 22% overall, compared to 48% globally.
  • In India, only 10% of women hold technical posts in the energy sector (International Energy Agency).
Factors Contributing to Gender Disparity:
  • Educational disparities, limited technical training opportunities, and inequitable company policies contribute to the gender gap.
Addressing Challenges:
  • Shifting perceptions about women’s roles in the energy sector is crucial.
  • Governments, non-state actors, and international institutions must collaborate to mainstream gender in energy policies.
Initiatives Driving Change:
  • Programs like Women at the Forefront and Energy Transitions Innovation Challenge promote women’s participation in sustainable energy.
  • Distributed Renewable Energy (DRE) initiatives, such as Solar Mamas in India, empower women by providing affordable energy access and skills training.
Economic Impact:
  • Closing the gender gap in employment and entrepreneurship could boost global GDP significantly.
  • Women’s participation in the energy sector leads to innovative solutions, increased productivity, and positive social and environmental outcomes.
Case Study:
  • Powering Livelihoods’ report indicates that over 71% of early adopters of clean technology livelihood appliances in India, totaling over 16,000, are women.
Conclusion:
  • Empowering women in the energy sector is not just morally right but also a strategic investment for global development.
  • Recognizing women as key agents of change in the energy sector leads to a more inclusive, prosperous, and sustainable world.
PYQ: Women empowerment in India needs gender budgeting. What are the requirements and status of gender budgeting in the Indian context? (200 words/12.5m) (UPSC CSE (M) GS-3 2016)
Practice Question:  Discuss the significance of integrating gender equality into sustainable energy policies for achieving comprehensive development goals.  (150 Words /10 marks)

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