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The article is written by Daksha Khanna, from Symbiosis Law School, NOIDA. The article discusses the job crisis in the Indian Government sector, employment schemes, job crisis during the pandemic COVID-19 and ways to deal with the crisis efficiently. 


The Indian economy is in the midst of a financial, economic and employment crisis for the past few years and now in a crisis due to the ongoing COVID-19 pandemic. The pandemic has mainly led to the loss of jobs among the blue-collar class. It is a topic that has been widely discussed across the nation. In 2018, the statistics from the National Sample Survey stated that the national unemployment was rising at the rate of 6% and the urban unemployment rate was 7.85% with the rural unemployment rate being 5.3%.

The factors affecting employment in the country are:

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  1. The fact is that the millennials are ready to work only for well-paid jobs and are not willing to join the workforce settling for lower remuneration, therefore being over skilled for the jobs that are easily available in the country.
  2. There has been a sharp drop in the number of jobs created by the government in 2018.
  3. The various employment sectors slowed down the process of their working after a deep impact because of demonetization, and have resulted in slowing down the process of employment and even a high reduction in the employment opportunities. 
  4. A sudden change in the consumption pattern of people, especially in a continuously changing economy like India, has resulted in unemployment and lack of job opportunities. For example,- the shift of consumption from cars and automobile purchasing to an increase in the usage of Ola or Uber. 

There is a lack of popper education, training, and skill development in the country. The programs must be aimed at providing higher-paying jobs and to perpetually attract the young demographic of the population towards attractive jobs. 

The above-stated reasons are how we can analyse that India is facing a huge job crisis in the government as well as the private sector.

Does India have sufficient government jobs to cater to the unemployed

Though India is the fastest developing economy, its connection between the economy and employment is weakening a little. The employment growth rate has decreased by 7% to 1%. Higher growth has raised aspirations of the aspiring youth but has failed to create those jobs which would match those aspirations. 

There are various job schemes started by the Indian Government to combat unemployment in the country. It would be challenging for the Indian economy to grow if the focus of the government is not shifted to job creation. Indian need more jobs. They do not have sufficient jobs, nor does the country have a robust job data or sufficient tools to measure job creation. There is a lack of applications that are sent to the Indian Railways where only a few thousand get selected due to the presence of only a few thousand jobs. The government needs to look for datasets and encourage their deep analysis and determine certain ways to measure job creation. The country requires better policy decisions and that too at the state and the central levels. 

Provisions under MGNREGA 

The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) is a legislation enacted in 2005. It provides a legal guarantee of employment for a hundred days in a financial year to an adult of rural household willing to do unskilled manual labour at a minimum wage.

  • MGNREGA guarantees employment for a hundred days in a financial year for unskilled manual labour.
  • Wage employment is granted to the applicant within 15 days of applying or from the day the work is demanded to be started. 
  • The applicants have a right to gain unemployment allowance in cases where employment is not provided within 15 days of the application.
  • The applicants are promised the payment of their employment wages within 15 days of the work done. 
  • Several permissible tests which can be taken up by the Gram Panchayats.
  • It focuses on the economic and social empowerment of women. 
  • It provides “decent” and “green” work, keeping in mind the environmental aspects. 
  • Section 17 of MGNREGA has made Social Audit for all the works mandatory. Social audit is the assessment of the scheme with the active involvement of people, and understanding the functioning of the ground reality. 
  • The scheme protects farmers from the risks of climate change and focuses on the conservation of natural resources.
  • The wage earners can make their demands and raise their voice for any inconvenience before the Gram Sabha and the Sabha resolves them on a priority basis. The Gram Sabha approved the works under the scheme. 
  • Majority of the works under the scheme are agriculture and allied activities besides rural sanitation projects.
  • Their works have been categorised like Irrigation, Watershed, Flood management, agriculture, Livestock, Fisheries, Sanitation etc.
  • Toilet building, soak pits along with solid and liquid waste management have been included under the scheme recently. 
  • Construction of Anganwadi Centres has also become a part of the scheme recently.

The MGNREGA has also indicated signs of slowing down in 2019-20. It has been showing the lowest tend since 2015-16.

Are reservations for EWS helpful

The 10% reservation of the Economically Weaker Section category is an application to persons who are not the beneficiary of any other sort of reservations for Scheduled Castes, Scheduled Tribes and Other Backward Classes. 

The Constitution (One Hundred and Third Amendment) Act,2019 passed by the Indian Parliament gives the authority to both the central and the state governments to provide reservations to the EWS from the general caste of the society for appointment in-state jobs, or state government institutions. 

The fact that the percentage of reservations increased to be more than 50%, it does not mean that the government has enough jobs. The motive of the reservation is to provide the opportunities to a specific group of people that are legally authorised to avail the benefit. To be precise, this means that when a 10% reservation has increased, out of the remaining candidates that are not provided with any reservation, 10% will no longer be considered for the appointment where, without the reservation, they might have been considered for the position. The fact that a group of economically weaker sections are given reservation does not essentially mean the government increased the number of jobs. The adjustment is made within the limited availability of the jobs. 

Thus, the reservations, technically, have not been proved to be of any essential help in the scenario of a job crisis. The area where it did help was that those who could not afford to get into institutions or sit for interviews were given relaxation through the act.

Are labour laws too restrictive

Labour laws are a part of the concurrent list which means that it is under the jurisdiction of both the central and the state government. There are 40 central laws and 160 state laws which have made the government act in a manner where it overlaps jurisdiction. 

The Industrial Disputes Act, 1947 the companies employing more than 100 workers cannot fire the workers on their own until they get permission from the government. They are not allowed to close down the factory or the plant. Even if those companies go bankrupt, they still have to pay the workers. This is where the compromise in manufacturing and quality comes into the picture.  The investment through foreign firms has become difficult keeping this criterion in mind because they would not start a business if they cannot get out of it even during losses. The fact that the companies are expected to keep the labourers employed does not fulfil the intention correctly. The motive is not just creating jobs but also not putting others out of work. In a company where the employer is not allowed to end the business even after being bankrupt is technically unemployed. This does nothing but leads to the slowing down of urbanisation. 

The Contract Labour (Regulation and Abolition) Act, 1970 prohibits the use of contract labour for the core taste in a company. The purpose was to protect the interests of the permanently employed. Since contract labour gives flexibility to companies, they have started with the contract labour force. The problem that was faced is that the contract labours are paid less than the permanent employees which defeat the purpose of labour laws to provide efficient wages. There is a need for a radical change in the existing labour laws that should help the country urbanize keeping the interests of the labourers in mind and also changes that are beneficial to the companies making use of labours.

What are the employment schemes by the government

  1. Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)– aims at enhancing the employment aspect of households in rural areas and provides 100 days of guaranteed wage employment in a financial year to an adult member of the household who volunteers for the unskilled manual labour. It was launched by the Congress-led UPA government in the year 2006. There were 2 billion person-days generated under the scheme in the year 2019-20.
  2. Sampoorna Rojgar Yojana– has the primary objective of providing skilled employment to improve the skill level in the rural and urban areas. The main focus is on providing employment to the unemployed youth looking for jobs and those that have a desire to do manual and skilled labour in and around their village or locality. The person gets fixed payment and incentives based on their performance. 
  3. Prime Minister’s Employment Generation Programme (PMEGP)– the scheme was announced on 15th August 2008. The primary objective of the scheme is to generate continuous and sustainable employment opportunities in Rural and Urban areas of the country. 
  4. Garib Kalyan Rojgar Abhiyan- it was announced by the Prime Minister on 20th June 2020 with a mission of 125 days covering 116 districts of six states namely; Bihar, Madhya Pradesh, Rajasthan, Uttar Pradesh, Odisha and Jharkhand. These states received back the maximum number of migrant workers. It ensures that each migrant worker gets the opportunity to work under the program and will also help them for the development and expansion of their livelihoods for the long-run. 

How is the pandemic changing the face of Indian labour law

COVID-19 pandemic has triggered public health and crisis in the economy. Some of the state governments last week decided to make changes in the labour laws. These changes are being made to increase economic activity in the states. The changes are applied to both the new businesses and existing ones. Employers can increase working hours in the factories and plants from 8 to 12 years and allow 72 hours per week as overtime. The factory registration will be done in a day and the factory license will be renewed after 10 years instead of a year. Further, a penalty will be imposed on the officials not complying with the deadline.

The states have begun to relax the laws to encourage industrial development and employing workers who have migrated back to their states. Further, the motive has been to increase revenue in the states and to ease the businesses and economic activities that had slowed down due to the nationwide lockdown. 

Why does India need job protection schemes like the USA

One of the major tastes done by the US government is foregoing loans for small businesses during the lockdown. Since India is a developing country there are a lot of other incentives that they can take for instance if not waiving a bank loan but lending cheap bank loans or tax incentives.

The Fair Labour Standards Act in the US ensures that their workers get a minimum wage with special protection for minors that limits the working hours for children. The Indian act called The Minimum Wages Act, 1984 ensures the same except protection for minors. Around 40% of the wage earners in the country get wages below the National Minimum Wage floor-rate. 

The US has unemployment benefits or an unemployment insurance agency that manages wages to the unemployed but the reasons for such unemployment must be out of their control. This ensures that Americans have a few months of security when they are unemployed. This could be instilled in the economy but through higher propaganda of self-employment, schemes run by the government. The Indian government cannot afford such an investment to the unemployed but can take the initiative by getting certain pending work done while giving the unemployed enough time to hunt for a more stable job. 

A very unique aspect that the American law has in its provision is the Whistleblower Protection where a person fears losing his/her job if they speak up. They can report their employers for violating the law and can file a complaint when they have felt that they have suffered punishment for reporting the company’s violation. 

The button line is that the American employees enjoy benefits and protection of jobs that are backed by legal protection among other safeguards. This is what can be adopted by the Indian government where they focus on other problems apart from the limited ones that get the maximum attention. 

Important provisions of the Employment Rights Act, 1996

The Employment Rights Act, 1996 in its first part defines employment contract and says that it must be in a written form provided to their employee within 8 weeks of the date when they start. It provides legal backing to the contract and establishes the expectations involved in the employment of a person, and the evidential basis of work. 

The second and the third part of the act elaborate on the wages and payments of the workers.

The fourth and the fifth part of the Act elucidates the disclosures and detriment that includes protections granted to the employee.

The employee rights for paid time off from their work is mentioned in parts IV, VI, VII of the act and further goes on to state the dismissal related to health and safety and flexible working hours. 

Part VIII states child care.

Part IX dissects dismissal notice and valid reasons for the same. 

Part X states the unfair dismissal of an employee.

Part XI states Redundancy.

Part XII discusses the employees’ rights if the company turns out to be insolvent at any point. 

Critical analysis

What the country needs is, firstly,  the collection of accurate data. It is only after that when the government will be able to create jobs for the unemployed. They need to dive deep into the search of jobs. The data that the government comes up with is sketchy and contradictory to what the reality is. The government needs to fill the vacancies in the government sector, as it is only through such efforts, that the youth of India will get employed. 

Further Covid-19 is when the unemployment in India will deepen, and after this, the youth are going to get more attracted to a government job,  as the prospects of private companies to be able to flourish in such a time is bleak. 

The government cannot ignore the indeed of the heart and has to start working on this front leaving the political dilemmas aside.


  1. To combat the job crisis in the country there can be a change in the investment pattern that takes place in the country. Mass consumer goods industries and their upliftment at this point would generate more employment to absorb the unemployed.
  2. Small enterprises can flourish better if greater investment is granted to those enterprises instead of the large ones. It can lead to the enlargement of both employment and output. 
  3. During the rapid growth of the labour force, it is recommended to switch to better choices of technology consistent with the objective of the employment. 
  4. The establishment of small industrial complexes can further generate employment and prove to be an efficient and successful effort to provide flexibility to the economy. 
  5. Lastly, the country requires Reorientation of the educational system to get greater employment opportunities. 


The job crisis in India is a hot topic and is widely discussed. The country can walk its glory with the right policies and stronger public-private cooperation with their efforts inclined towards building a better and a skilled workforce that feeds the purpose of the future. The optimism that will get this country through the crisis is that the economy has already hit the bottom and is expected to lift itself at a slow pace. The government is focussing on putting in efforts on the problem, that is currently being faced, and is especially focussing on the construction sector that can absorb maximum unemployment. Lastly, the 2020 budget has given people expectations of providing some sort of boost to the country.


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