22 Mar Unemployment and The Government’s schemes to tackle it : An Analysis
Context : After COVID -19 pandemic, the rate of unemployment increased rapidly . However governments tried to give some relief to those person who have suddenly fired and lost their jobs through certain schemes but Laws and schemes have failed to offer relief to workers reeling under many blows
Introduction : Unemployment has been a big problem in India for several years and even before COVID-19, the unemployment rate touched a peak in 2017-18 at 6.1%. . The urban unemployment rate was 7.8% and the rural unemployment rate was 5.3%. . However, during the year of 2018-19 and 2019-20, the unemployment rate declined to 5.8% and 4.8% respectively . Urban and Rural both unemployment rates decreased but still the unemployment rates are above t0 7 % during 2021 and if we see the quarterly date of unemployment during Jan – March 2021, it was 9.4 5% and rose to 12.6 % in April to June 2021. . However during last month this rate of unemployment fluctuated between 5 to 7 % . Is there any scheme to tackle the situation of unemployment effectively? Definitely NO, Unlike China, there are no single schemes exist which could provide effective relief to unemployed person
Schemes to Tackle the problem of Unemployment
However there is a scheme the Rajiv Gandhi Shramik Kalyan Yojana (RGSKY) which provide unemployment allowances to involuntarily unemployed insured persons who have made contributions for two years to ESI. This scheme is under the scheme of State Insurance Act (ESIA), 1948. It covers unemployment due to retrenchment, closure or permanent invalidity. It provides medical care during unemployment tenure and vocational training.
Apart from this , Atal Beemit Vyakti Kalyan Yojana (ABVKY) was started in 2018 under which unemployed insured persons are provided an allowance at the rate of 50% of the average per day earning of the claimant for 90 days on a pilot basis for two years. This period was extended during COVID-19, pandemic
Besides, there is a Act Industrial Disputes Act (IDA), 1947, , which provides compensation of 15 days of average pay for the completed years of service to workers in case they lose jobs due to government-sanctioned workers’ retrenchment or closures of establishments. But the must be recognized by the government and there must be minimum 100 employees . But here we see the financial burden imposed on employers . Therefore generally employers protect them from such types of schemes .
However there is Social Security Code (SSC), 2020, which also talks about social security but this does not provide any specific relaxation , It provides the allowances under the ESI Act.. Social security is required for the unorganized sector . However this social security is being provided through EPF (Employment Provident fund) but the reduction of the interest rate on EPF would be contradictory to the welfare of employees of the unorganized sector .
Failure of the Schemes
If we see the data provided by Annual Reports of the Employees’ State Insurance Corporation (ESIC), under the RGSKY, from 2007-08 to 2019-20, 13,341 insured persons availed of unemployment allowance (1,034 insured persons per year). To put this in context, 0.043% (13,341/3,09,66,930) of the employees availed of unemployment allowance during this period. Further, unemployment allowance’s share in total cash expenditure of ESIC ranged from 0.25% to 0.99%. These data are sufficient to explain the failure of the schemes
However , if we see the data regarding the relief provided to unemployed Under ABVKY, only 120 people claimed (1 July 2018 to 31st March 2020). During COVID-19, period it was extended up to June 2021 and only 45,311 are persons benefited with an average daily cash relief of ₹147.65.
Therefore on the basis of the above fact, it can be clearly said that these schemes are not sufficient to provide relief to unemployed persons .
On the other hand , during the pandemic MGNREGA played a significant role in providing employment . But this is limited in rural areas. There must be some schemes like MGNREGA for urban area also so that the problem of unemployment could be tackled
Conclusion
As per the above discussion , we see the vulnerable condition of unemployment in India and during the Corona pandemic this condition became worse . All the government schemes to tackle the unemployment situation failed . In India , still there is no scheme which provides any proper relief to the unemployed person. There must be need of a scheme similar to MGNREGA for the urban areas also , so that the situation of unemployment could be tackled
Plutus IAS Current Affairs Team Member
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