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Fostering growth of micro, small, and medium enterprises is critical to create jobs, even as a skill development overdrive is needed for productive employment, says the Economic Survey 2014-15.
Stating that merely 2 per cent of the country's workforce is skilled, the survey tabled on Friday in Parliament said: ‘There is a dual challenge of developing skills and utilizing them in a proper way’.
‘Promoting growth of micro, small, and medium enterprises is critical from the perspective of job creation which has been recognised as a prime mover of the development agenda in India,’ it said.
Dearth of formal vocational education, high school dropout rates, inadequate skill training capacity, negative perception towards skilling, lack of industry ready skills even in professional courses are the major causes of poor skill levels of India's workforce.
Quoting the Labour Bureau Report 2014, the Survey says that present skilled workforce in India is only 2 per cent, which is much lower when compared to the developing nations.
As per the report, the number of people aged 15 years who have received or be receiving skills is merely 6.8 per cent.
The survey said that a major impediment to the pace of quality employment generation in India is the small share of manufacturing in total employment.
However, data from the 68th National Sample Survey Organisation round (2011-12) indicates a revival in employment growth in manufacturing from 11 per cent in 2009-10 to 12.6 per cent in 2011-12.
This is significant given that the National Manufacturing Policy 2011 has set a target of creating 100 million jobs by 2022.
The survey said there is deceleration in the compound annual growth rate of employment during 2004-05 to 2011-12 to 0.5 per cent from 2.8 per cent during 1999-2000 to 2004-05 as against growth rate of 2.9 per cent and 0.4 per cent respectively in the labour force for the same periods.
There have also been structural changes to the share of primary sector in total employment has dipped below the halfway mark while employment in secondary and tertiary sectors have shown a considerable increase.
Self-employment continues to dominate, with a 52.2 per cent share in total employment with significant share of workers engaged in low-income-generation activities, the economic survey added.
The economic survey also observed that there are other issues of concern like poor employment growth in rural areas, particularly among women.