Mallikarjun Kharge in an interview with Sameer Kochhar, Editor-in-Chief, Inclusion

Social unrest bred by youth unemployment will have serious consequences for governance. The possibility of social exclusion as a consequence of youth unemployment is a serious problem for India now. To harness India's demographic dividend, skill development is the key. To address the issue, the government is attempting to bring about a paradigm shift in skill development, says Minister of Labour & Employment.

Sameer Kochhar: Skilled manpower is the backbone of the economy. But we have shortage of skilled manpower. How can this anomaly be corrected?

Mallikarjun Kharge: The government has set up the National Skill Development Mission (NSDM) to bring about a paradigm shift in skill development. The Mission encompasses the efforts of several line ministries of the central government, state governments and the private sector, supported by three institutions. These institutions are: (i) the National Council on Skill Development under the chairmanship of the Prime Minister to review the spectrum of skill development efforts for policy direction; (ii) National Skill Development Coordination Board under the chairmanship of Deputy Chairman, Planning Commission, to enumerate strategies to implement the decisions of the PM’s council; and, (iii) National Skill Development Corporation (NSDC), a non-profit company under the Companies Act, 1956, of which 49 per cent of equity base is contributed by the central government and 51 per cent by the private sector. The corporation is expected to meet the skill training requirements of the labour market, including the unorganised sector.

As a part of Mission, the government has approved the National Policy on Skill Development (NPSD), a guiding document aimed at empowering all individuals through improved skills, knowledge, and nationally and internationally recognised qualifications to gain access to decent employment. The NPSD has set a target for skilling 500 million persons by 2022. This target has been distributed amongst the line central ministries. The target for NSDC is 150 million and for the Ministry of Labour & Employment is 100 million. State governments have been advised to set up state-level missions. As a follow-up, 25 states and four union territories have set up such missions.

SK: How does it impact growth and governance?

MK: Skill development is essential for improving productivity, which in turn leads to improved growth of economy and living standards of the people. There is an increasing demand for skilled workforce globally due to intensified competition and technological diffusion. Our ministry has taken various initiatives for qualitative improvement in skill development as well as to address the issue of skill mismatch. All ITIs are being upgraded under three centrally funded schemes. Quality Council of India has been engaged for accreditation of our Advanced Training Institutes and ITIs as per ISO 29990 standards. Skilled manpower for our industry would lead to good governance automatically.

SK: According to the labour ministry data released in 2012, the unemployment rate among rural educated youths is higher compared to their urban counterparts. This indicates that higher education and degrees are not helping rural job aspirants. How serious the problem is and what are the ministry’s plans to address it?

MK: As per the Second Employment Unemployment Survey conducted by the Labour Bureau in 2012, the unemployment rate estimated for 2011-12 for rural and urban areas was 2.9 per cent and 4.7 per cent, respectively. For improving the employment opportunity in rural area, the Union government is implementing Mahatma Gandhi National Rural Employment Guarantee Act, Swarn Jayanti Gram Swarojgar Yojana and the Prime Minister’s Employment Generation Programme (PMEGP). My ministry is contemplating to amend the Minimum Wages Act, 1948 to enhance the income level in the rural/unorganised sector.

SK: What in your view should be done to harness the demographic dividend?

MK: The provision of gainful employment opportunities for the youth is one of the surest means to harness the demographic dividend. The possibility of social exclusion as a consequence of youth unemployment is a serious problem for society as a whole. Socially inclusive and equitable skill development is an important policy instrument of our government to harness India’s demographic dividend and gain competitive advantage in world trade. The NSDM’s goal is to provide within a five-to-eight year timeframe, a pool of trained and skilled workforce sufficient to meet domestic requirement, with surpluses to cater to the skill deficits in ageing economies.

To tackle youth unemployment, both demand and supply sides must be addressed together. Skill development programmes must comprise both off-the-job training and work placements. Training must be directed towards the existence and creation of effective labour market opportunities. So, the policies must include educational support, training, subsidised work, job search assistance and career advice. Policies must create conditions to give the young and inexperienced some foothold in the labour market. Programmes must also be devised keeping in mind the various target groups, even among the youth. Special attention should be given to design programmes for the disadvantaged groups.

SK: Can you throw some light on your roadmap to reduce the disparity in minimum wages prevailing across the country?

MK: As regards minimum wages in states, there is widespread disparity due to variations in socioeconomic and agro-climatic conditions, income, prices of essential commodities, paying capacity, productivity and local conditions. With a view to reduce the disparity in minimum wages across the country, the concept of national floor level minimum wage on a non-statutory basis was mooted on the basis of the recommendations of the National Commission on Rural Labour in 1991. The national floor level minimum wage has last been revised to 115 per day with effect from 1st April 2011.

SK: Our labour laws are archaic and need to be reformed urgently. What are your views?

MK: Review/updation of labour laws is a continuous process and amendments are made from time to time in line with the changing socioeconomic scenario. Recent amendments carried out include those under the Payment of Wages Act, 1936; the Payment of Bonus Act, 1965; the Apprentices Act, 1961; the Payment of Gratuity Act, 1972; the Employees’ State Insurance Act, 1948; the Industrial Disputes Act, 1947; the Plantation Labour Act, 1951; the Maternity Benefit Act, 1961; and, the Workmen’s Compensation Act, 1923 (now known as Employees’ Compensation Act, 1923). In addition, the government has introduced in Parliament the Labour Laws (Exemption from Furnishing Returns and Maintaining of Registers by Certain Establishments) Amendment Bill, 2011; the Mines (Amendment) Bill, 2011; the Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Bill, 2011; and, the Child Labour (Regulation & Abolition) Amendment Bill, 2011. Recently, the government has approved Bills for amendment in the Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959, and the Building and Other Construction Workers’ (Regulation of Employment and Conditions of Service) Act, 1996.

SK: What is your view on labour issues like social security, equal pay and contract labour, etc.?

MK: The social security schemes in India cover only a small segment of the organised workforce, which may be defined as workers who are having a direct regular employer–employee relationship within an organisation. The social security legislations in India derive their strength and spirit from the Directive Principles of the State Policy in the Constitution of India. These provide for mandatory social security benefits either solely at the cost of the employers or on the basis of joint contribution of the employers and the employees. While protective entitlements accrue to the employees, the responsibilities for compliance largely rest with the employers. The principal social security laws enacted in India are Employees’ State Insurance Act, 1948; Employees’ Provident Funds & Miscellaneous Provisions Act, 1952 (Separate provident fund legislations exist for workers employed in Coal mines and tea plantations in the state of Assam and for seamen); the Employees Compensation Act, 1923; Maternity Benefit Act, 1961; Payment of Gratuity Act, 1972; Unorganised Workers’ Social Security Act, 2008; Equal Remuneration Act, 1976, and Contract Labour (Regulation & Abolition) Act, 1970. The Unorganised Workers’ Social Security Act, 2008 provides social security to workers in the unorganised sector. The Equal Remuneration Act, 1976 provides for payment of equal remuneration to men and women workers for same work or work of similar nature without any discrimination. The interest of contract workers is protected in terms of wages, hours of work, welfare, health and social security etc. under the Contract Labour (Regulation & Abolition) Act, 1970.

SK: How the Ministry of Labour & Employment is playing its part in the overall development and growth of the country?

MK: The broad mandate of the ministry are: protect and safeguard the interests of workers and in particular workers of the unorganised sector who constitute the poor, deprived and disadvantaged sections of the society; creating proper environment in the workplace for attaining higher production and productivity; ensuring implementation of safety and health standards at the workplace; enhancing vocational skill training and employment services; provide social security to the labour, particularly those working in the unorganised sectors; and maintain harmonious industrial relations for facilitating higher production.

In the international fora, we are also always guided by ILO Social Justice Declaration, 2008 which gives importance to national needs and priorities. We are also promoting key relevant issues like employment, rights at work, social dialogue and social protection, which help in overall development and growth of the country. On these issues, our basic stand is that any initiative to implement and promote these issues should be nationally-determined and aligned.

(The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of INCLUSION. Comments are welcome at

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