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The youth not in education employment or training are often targeted for educational and vocational training programmes. India too has developed such programmes particularly the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) the flagship scheme of the Central government.

However as pointed out in the NCAER Skills Report 2018 titled ‘Skilling India: No Time to Lose’ there are sectoral and gender differences among the youth. Schemes such as the Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDU-GKY) are targeted at rural youth. However a gendered approach is needed in the various educational and training programmes to connect or transition the youth to jobs.

The NCAER report had proposed the framework of Acquiring-Matching-Anticipating framework to resolve the skilling challenge in India. This article extends the work done in the NCAER report by using latest available data and finds that the conclusions remain broadly the same.

The status of youth (15-29 years) from the Periodic Labour Force Survey (PLFS) 2017-18 shows that the youth are either studying (34.5 per cent) working (30.4 per cent) looking for jobs (6.7 per cent) studying and working/seeking jobs (1.2 per cent) or not doing any of the above activities (27.2 per cent).However there are gender differences amongst the youth.

The percentage of youth pursuing only education had shown improvement between 2011-12 and 2017-18 which was consistent across gender. While 37.1 per cent of the youth was in the labour force there is a large difference between labour force participation between men (57.1 per cent) and women (15.8 per cent). About 46.8 per cent of the male youth was only working whereas the corresponding number for females was 12.9 per cent.

These numbers showed deterioration between 2011-12 and 2017-18. Ten per cent of the young males were unemployed — that is actively seeking jobs — whereas the corresponding number for females was 2.9 per cent. Unemployment rates across gender increased between 2011-12 and 2017-18.

There is a small percentage of youth that is also trying to pursue education and work simultaneously the share of which has declined between 2011-12 and 2017-18. In the age-group 15-29 1.5 per cent of males and 0.6 per cent of females were working and studying simultaneously in 2017-18.

Stark contrast

Of the youth aged 15-39 27.2 per cent belonged to neither in education nor in labour force (NENLF) category in 2017-18. Out of that 94 per cent were women. As the table shows 53 per cent of female youth in the age-group 15-29 belonged to the NENLF category. This share had increased from 50.1 per cent in 2011-12.

In contrast the share of male youth in the NENLF category hovered around 3 per cent in both 2011-12 and 2017-18. The number is even starker if we look at the age-group 25-29 with 71.4 per cent of the females falling in the NENLF category. Irrespective of the macroeconomic conditions a larger share of young women continue to be in this category.

The PLFS 2017-18 allow us to explore what the youth in the NENLF category are doing. As much as 58.1 per cent of the females in the NENLF category aged 15-29 were doing domestic chores.

And 59 per cent of the males in the NENLF category were doing other activities not defined in the PLFS.

What does this inform us about policy? India needs to structure its programmes which enhance opportunities for youth to pursue both education and skilling and work simultaneously. From the perspective of the male youth the sum of unemployed and NENLF youth (13.2 per cent of young males) should be the focus of policies especially PMKVY and DDU-GKY programmes.

For them perhaps a training programme which allows them to study and work — that is apprenticeships and internships or evening study programmes or skilling programmes provided at clusters — may go a long way in acquiring job-relevant skills. Placement programmes should also form a key component of these.

Shift from domestic chores

The challenge is how one gets 53 per cent of the young females to shift from doing domestic chores to formal education and training programmes and thereby jobs.

Along with these programmes the young women need life skills. While researching for the NCAER Skills Report 2018 it was found that SEWA Bharat offered an illustration of what needs to be done.

The NGO has skilling programmes for females which enhance their confidence develop their soft skills and enhance personality along with acquiring vocational skills.

The organisation also offers counselling and mentoring.

Based on the SEWA Bharat principles a scalable and sustainable approach needs to be developed to address the female skilling challenge which can offer the package of programmes at the last mile. Secondary schools are the natural channel but the challenge is to get the girls to schools.

Bicycle programmes or dedicated school transport may help overcome the gap. Participation in self-help groups female youth clubs at the village level mentorship programmes with educated females in local areas may be channelised in providing soft skills and a well-rounded approach.

India will never achieve its demographic dividend if 27.2 per cent of its youth neither pursue education nor are part of the labour force. A gendered approach in educational and skilling programmes is needed urgently to overcome the employability challenge in India.

The writers are Bornali Bhandari Senior Fellow and Ajaya Kumar Sahu Senior Research Analyst respectively at NCAER. The views are personal

As another year draws to a close it is pertinent to ruminate Janus-like once again over past and future gender parity trends both in India and abroad. And the picture is not a pleasant one. In fact the year is ending on a grim note for women all over the world with the Global Gender Gap Report 2020 predicting that as things stand currently overall gender parity will not be attained for another 99.5 years. The report which is being prepared by the World Economic Forum (WEF) since the last 14 years examines gender parity in 153 nations on the basis of four dimensions: Economic participation and opportunity educational attainment health and survival and political empowerment.

Despite its gloomy forecast this year’s report offers a mixed bag. While flagging greater political participation of women across countries it asserts that gender parity has in fact been achieved in 40 of the 153 countries it surveyed. And the best performers as usual are the Scandinavian countries with Iceland Finland Norway and Sweden leading the pack. Nicaragua New Zealand Ireland Spain Rwanda and Germany followed close behind to line up the top 10. As many as 101 countries succeeded in improving their scores over the 2019 rankings even as nations like Albania Ethiopia Mali and Mexico rose above their economic challenges to grant consistent greater economic empowerment to their women.

But where does India figure in this count? In the bottom 50 coming in at rank 108 out of 153. This poor showing by an ostensibly rapidly growing economy is largely the result of a gender pay gap emerging from Indian women’s decision to stay out of the workforce or drop out of it due to various factors. Pointing out that India ranked lower on all the four segments being assessed the WEF highlighted the need for India to “make improvements across the board — from women’s participation to getting more women into senior and professional roles.” The report goes on to say that the economic gender gap runs particularly deep in our country and has gotten significantly wider since 2006 with the country also being the only one among the 153 countries studied where the economic gender gap is larger than the political gender gap.

This curious decline in women’s economic participation despite a rise in their education levels has also been documented by the India Human Development Survey (IHDS) a nationally representative multi-topic panel survey of 41554 households conducted in two waves in 2004-05 and 2011-12 by the National Council of Applied Economic Research (NCAER) in collaboration with the University of Maryland. The IHDS not only covered a wide range of topics concerning health education employment economic status marriage and fertility but also canvassed an exclusive module administered to 33510 ever-married women aged 15-49 years during the survey. According to IHDS data many nations have experienced a U-shaped relationship between economic development growth and women’s workforce participation. However in India unlike other South Asian countries women have failed to rise above the bottom of the U-curve for several decades irrespective of consistent economic growth perhaps because the country’s formal economy has grown without offering any specific or substantial opportunities to women through feminisation of the labour force.

According to IHDS women’s Labour Force Participation Rate (LFPR) fell alarmingly from 31.12 per cent in 2005 to 24.77 per cent in 2012. The IHDS findings have also been endorsed by the 68th Round of the National Sample Survey Organisation (2011-12) which in turn records a corresponding fall in the female LFPR from 28.7per cent to 22.5 per cent since the previous NSSO survey. Concomitantly the WEF report also lowered India’s gender ranking for economic opportunities from 139 in 2017 to 142 in 2018.

Another observation peculiar to India is the paradox of a decreasing Child Sex Ratio (CSR) or the ratio of girls to boys which in 2016 was reportedly at the lowest level since 1951 notwithstanding progressively higher educational attainment among girls. Thus even though more parents across States and communities have started sending their daughters to school and college they still express a preference for sons for a variety of reasons ranging from the prevalence of dowry the burden of ensuring safety of girls and the support provided by sons in old age. As Carol Vlassof Professor at the University of Ottawa and long-time researcher on gender issues in India avers “The bias against daughters can end only if women’s education is accompanied by social and economic empowerment.”

Even worse is India’s gender-based performance in the domain of health and survival. The WEF report ranks the country third lowest for this parameter just above Armenia and China categorising it as the “least improved country” on this sub-index over the past decade. This result comes as no surprise considering the fact that by and large Indian women have little autonomy in decision-making even in matters of personal health.

Here too the IHDS report in 2005 which had surveyed over 74 per cent of the women stated that they needed permission just to visit a health centre let alone exercise control over their bodies and health-related issues. And this figure had gone up to 80 per cent when IHDS revisited its sample households in 2012.

Interestingly among the women reporting the lack of agency in health matters 80 per cent affirmed that they had to seek permission from their husbands 79.89 per cent from a senior family member and even more significantly 79.94 per cent revealed that they had to consult a senior female family member for such permission. The implication inherent in this finding — that women in dominant family roles tend to exercise stringent control over their less assertive female counterparts in the family — also has serious implications for female sorority and mutual support.

It is obvious that without policy and legislative changes and in view of persistent refusal to alter conventional mindsets that perpetually relegate women to household and care duties India’s female population is unlikely to emerge from the morass of poor economic performance coupled with low health outcomes and unequal access to opportunities.

Coming back to the 2020 Gender Gap Report India would do well to heed the advice of the WEF Founder and Executive Chairman Klaus Schwab that “only countries that are able to harness all their available talent (both male and female) will succeed in the Fourth Industrial Revolution. Proactive measures that support gender parity and social inclusion and address historical imbalances are therefore essential for the health of the global economy as well as for the good of society as a whole.” Is India listening? Or does it want to retain its dismal position on the Gender Index next year too

(The writer Anupma Mehta is Consultant Editor at the National Council of Applied Economic Research. Views expressed are personal)

Business e-Readiness assesses the ability of private businesses to use and produce Information Communication and Technology (ICT)/ICT-enabled goods and services. Adoption of Information Communication and Technology is productivity-enhancing and thus merits an attention. To evaluate medium-term trends in Indian firms’ adoption of ICT business e-readiness was assessed first in September 2016 and then in September 2019.

The Survey has adapted an international framework used in its e-Readiness studies. The framework involves assessing firms on environment (policy and infrastructure) readiness (on ability to use and produce) and usage (use ICT-enabled goods and services). It uses the platform of the quarterly Business Expectations Survey that assesses business sentiments of 500-600 firms across six cities in India. The East covers Greater Kolkata the North covers the National Capital Region of Delhi the West covers Mumbai and Pune while the South covers Bengaluru and Chennai.

Environment

The Environment component assesses the ICT policy of the company and the infrastructure quality of its local industrial area. Together they provide an enabling environment for effective functioning of firms. The share of firms responding positively to the presence of an ICT policy has gone up between 2016 and 2019. Interestingly even 71.2% of firms with annual turnovers of less than `1 crore responded that they had an ICT policy. While other regions showed improvement between 2016 and 2019 proportion of firms in South with ICT policy went down from 91% in 2016 to 81.6% in 2019. The East had the highest number at 91.7%.

Infrastructure Environment

The proportion of firms responding “good” to the ICT infrastructure in their industrial areas from East West North and South was 85% 58% 77.4% and 74.1% respectively.

Readiness

The Readiness component involves assessing skill-capacity of firms to use the enabling environment use of various software and the integration of their accounting software with the Goods and Services Tax Network (GSTN). In this domain the overall share of positive responses on presence of IT department or dedicated IT manager has gone up between 2016 and 2019. There were regional variations in 2019—89.2% in East 48.3% in West 59.5% in North and 46.9% in South. Barring the West (2016: 70.6%) remaining regions showed improvement between 2016 and 2019.

The use of software has improved between 2016 and 2019. The proportions of firms responding positively to this question from East West North and South in 2019 was 97.5% 91.5% 78.4% and 91.8% respectively. Barring the North (2016 84.8%) all other regions experienced improvement. Further 67.5% of firms in 2019 responded that they had an accounting software which was linked to the GSTN.

The share of responses for computer literacy as a pre-condition for hiring managerial workers and imparting ICT training to them increased between 2016 and 2019.

The share of firms pointing that computer literacy was a pre-condition for hiring managerial workers in 2019 was 93.3% 71.2% 100.0% and 97.1% in East West North and South respectively. Barring the western region (97.1% 2016) all other regions experienced an improvement. Interestingly computer literacy is also becoming a pre-condition for hiring unskilled works (19.8% in 2019). This suggests that digital skills are increasingly becoming a pre-requisite for all types of jobs.

The share of firms responding to the issue of imparting ICT training to managerial employees in the East West North and South in 2019 was 31.9% 70.4% 55.2% and 96.2% respectively. While the East and South showed improvement (17% and 53.2% respectively in 2016) the West and the North show worsening in this regard (96.1% and 64.4% in 2016).

In the Usage domain there has been a significant improvement especially in use of ICT in finance and accounting. However the share of responses had come down in the West between 2016 and 2019 in finance and accounting human resources and administration and sales/marketing/public relations.

Overall 69.7% of respondents said that they were transferring more than 75% of their employees’ wages electronically. The corresponding numbers for the East West North and South in 2019 were 53.3% 86.4% 56% and 80.3% respectively.

In sum over time business e-Readiness has improved nationally between 2016 and 2019. The East is relatively the best performer in the Environment domain and use of software. However the North and South are the best in terms of digital skills and the South in terms of ICT usage.

The East has made significant improvement between 2016 and 2019. Simultaneously the West which had fared the best in 2016 shows worsening.

Adoption of new technology usually responds to external environment. Thus regional heterogeneity in e-readiness needs further examination as to whether these are due to variation in business conditions or other reasons.

Bhandari is a senior fellow Gupta an associate fellow and Sahu a senior research Analyst at NCAER. Views are personal

With the GDP growth rate falling to 5% in the Q1 of 2019-20 and forecasts suggesting a further fall in the Q2 of 2019-20 there is an urgent need to look at all the demand drivers of economic growth because that is what is driving the current slowdown in the short run. One of the key channels of demand is the external one. In fact the year-on-year growth rate of exports and imports of goods and services fell to 1.5% and (-)6.9% in the Q2 of 2019-20 versus 26.1% and 32.9% in the Q1 of 2018-19 respectively. Essentially we ask two questions in this article. First what may India do to increase its growth rates of exports and imports? Second does India have mechanisms present for gainers from trade to compensate losers as it opens up externally?

The current state of affairs is worrisome especially when we look at it in the context of Indian economic history. We find that the ongoing decade has seen a fall in the average growth rate of exports and imports but their shares to GDP have risen. The average growth rate of exports in 2010s is lower than in the past two decades and the average growth rate of imports is the same as in the 1980s. Of course world trade has also slowed down in the current decade especially after the 2008 recession. Steps such as demonetisation and the implementation of the goods and services tax (GST) in India took a toll on the Indian external sector. But then how does one explain the rise in the shares of exports and imports. This is a puzzle and clearly a problem for a low-middle income country. In 2017 the share of Indian merchandise exports in total world merchandise exports was 1.7% and imports was 2.5% (World Trade Organisation WTO). India ranked 20th in merchandise exports and 11th in merchandise imports that year. The Indian share in total exports of commercial services was 3.5% in 2017 and for imports it was 3%.

There is both theoretical and empirical evidence in the economics literature that trade is beneficial for economic growth. India’s own economic history proves that infant industry arguments do not really work. Also the presence of China cannot be held as an argument to hold back India from opening up because internationally other countries like Bangladesh and Vietnam are benefiting from opening up their economies. However there are always certain groups within a country that gain from international trade and others that don’t. Mechanisms may be found for gainers to compensate the losers.

One needs to look at the supply and demand sides of both exports and imports to answer the first question. Export supply and import demand are affected by Indian GDP prices and exchange rates etc. Export demand depends on rest of the world income prices and exchange rates. Import supply is assumed to be perfectly elastic.

The recommendations to improve supply of exports have been articulated many a times—improve the competitiveness of Indian products in the global economy. That would involve steps like investing in physical and digital infrastructure revamping labour laws filling the skill gaps facilitating the availability of land at market prices limiting the administrative procedural delays with regard to various steps involved in setting up or expanding units.

Can India try and improve demand for its products in an environment of trade wars and rising protectionism? It can by either developing new markets for its products or developing comparative advantage in products for which there is external demand or being part of global value chains (GVCs). Doing the latter two takes time. As Saon Ray and Smita Miglani’s book ‘Global Value Chains and the Missing Links: Cases from Indian Industry’ points out India’s engagement with GVCs has been limited and India’s imports are dominated by intermediate imports. The World Development Report 2020 notes that “a 1% increase in GVC participation is estimated to boost per capita income by more than 1% or much more than the 0.2% income gain from standard trade.”

The short-run solution is to find India new markets for its exports. In that context not joining the Regional Comprehensive Economic Partnership (RCEP) may prove to be a costly mistake. Not being part of the RCEP essentially means that in the short run 20% of our weak external demand is further dampened. This argument is also supported in a general equilibrium framework in a paper submitted by the National Council of Applied Economic Research (NCAER) to the High-Level Advisory Group (HLAG) appointed by the government of India. Plus the withering away of the WTO (The Economist November 28 2019) means that India is not a part of any significant multilateral trade block.

The second topic is that of exploring mechanisms to compensate groups that do not directly benefit from opening up of trade. Worldwide there are two ways—either we give unemployment benefits and/or reskill them for different professions. India is in the process of developing fairly sophisticated systems for both. Here identification of the beneficiaries would not pose a problem. Direct benefit transfers may be used as a mechanism to provide unemployment benefits for a particular period of time to people losing jobs from opening up of India’s external sector. This can be combined with subsidised upskilling and reskilling programmes.

Therefore the answer to the first question is trying and finding out new markets in the short run and in the medium run improve both export supply and demand conditions. In response to the second question India is developing quite rapidly in both social security and skilling mechanisms.

Bornali Bhandari is senior fellow and Prerna Prabhakar is associate fellow NCAER. Views are personal