Explained Ideas: How India can boost employment in the next couple of years

Labour regulation must start with a clear-eyed recognition of facts, writes Forbes. (Illustration by C R Sasikumar)

Employment is one such area. “There are three problems we must address: Labour regulation, living conditions for migrant labour in cities, and the strength of our rural economy,” states Forbes.

Labour regulation must start with a clear-eyed recognition of facts. We have stringent labour laws to protect workers, but this covers only the formal sector — under 15 per cent of employment. The 85 per cent of our workforce who are informally employed, meanwhile, have almost no protection, and employers have almost complete flexibility. “We need to address both ends of the labour spectrum to get the balance right between flexibility and protection for all labour,” states Forbes.

Living conditions in our cities is the second challenge. India is unique in having 70 per cent of our population still residing in rural areas. We must encourage the migration of people to higher productivity occupations in our cities. And we must ensure that clean, affordable and accessible housing is available for all in our cities.

Reverse migration is also an opportunity to collaborate in spreading the geography of development. We have long had policies aimed at getting firms to invest in less-developed districts and the current government has an ambitious goal of doubling farmer’s incomes.

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But the gap between the richest (urban) and poorest (rural) districts in the country still keeps growing. The easiest way to grow farmer incomes is by having them grow more value-added crops. The Atmanirbhar agricultural reforms, which permit contract farming, and open up agricultural markets, are major medium-term reforms. Implemented right, they can transform agricultural markets.