Underemployment a more serious problem than unemployment, says NITI Aayog’s 3 year Action Agenda

The more serious problem for India is underemployment and not unemployment, according to government’s policy think-tank

NITI Aayog’s 3-year Action Agenda, a part of its 15-year Vision and Strategy document.

“Indeed, employment is the lesser of India’s problems. The more serious problem, instead, is severe underemployment. A job that one worker can perform is often performed by two or more workers. In effect, those in the workforce are employed, but they are overwhelmingly stuck in low productivity, low wage jobs,” according to the action document.

NITI Aayog today launched the three-year action agenda, which has replaced the five-year plan process. The 12th five-year plan, 2012-17 was the last of these plans.

The action agenda is a crucial contribution of the outgoing NITI Aayog Vice Chairman Arvind Panagariya, who will go back to academia next month.

The document talks about crucial macroeconomic policy recommendations pertaining to tax policy, fiscal deficit, farmer income, gold and the problem of banks’ non-performing assets.

Finance Minister Arun Jaitley, while launching the document, said that the recommendations of the agenda were stiff.

The document has called for reducing import duty on gold as it would help reduce the volume of the yellow metal smuggled into the country, thereby, reducing the potential for illegal transactions.

“At a buyer level, it has created a monetary incentive to pay for gold in cash in exchange for a cheaper price,” it said.

The three-year action agenda also said an urgent action is required to resolve the issue of NPAs.

“Under the circumstances, the practical solution would be to support the auction of the larger assets to private asset reconstruction companies (ARC),” it said.

The government should strengthen the State Bank of India-led ARC to actively participate in the auction, it said.

Emphasis was also to replicate the Chinese strategy by creating two coastal economic zones, one on east and other on the west coast.