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Tamil Nadu faces skills gap amidst rising graduate numbers joining the workforce
Industry News- Aug 20,24
The state government’s Naan Mudhalvan scheme, aimed at creating entry-level jobs, has been praised, though experts suggest expanding its scope and involving more firms.
Tamil Nadu outperforms many states in employment metrics, but the state is grappling with significant challenges related to underemployment and a mismatch between education and skills. Despite producing the highest number of graduates in India, the state struggles to align these graduates with the demands of the workforce.
The Periodic Labour Force Survey (PLFS) conducted by the Union Ministry of Statistics and Programme Implementation offers some insight into the employment scenario across India. According to the 2022-2023 survey, Tamil Nadu’s labour force participation rate (LFPR), which includes those working, seeking work, or available for work, stands at 46%, compared to the national average of 42.4%. The state's Worker Population Ratio (WPR) is also higher than the national average, with 44% of the population employed compared to 41.1% across India. The state also boasts a higher female WPR of 31.6%, compared to 27% nationally.
However, the unemployment rate among educated individuals in Tamil Nadu, particularly those with secondary education, is 9.4%, above the national average of 7.3%. Among graduates, the unemployment rate is even higher at 16.3%, compared to the all-India rate of 13.4%. Youth unemployment (ages 15-29) in the state is 17.5%, significantly higher than the national rate of 10%.
The PLFS also highlights the prevalence of informal workers in Tamil Nadu, with 65.7% of the workforce engaged in the informal sector, compared to 74.3% nationally. Despite having the highest number of factories in India, Tamil Nadu still faces challenges in generating adequate formal sector employment.
The state government has taken steps to address these issues, claiming to have attracted investments worth over Rs 10 trillion and created about 3.1 million jobs in the past three years. Additionally, Chief Minister M.K. Stalin announced plans to fill more than 75,000 government vacancies within the next 18 months.
A. Kalaiyarasan, Economist, Madras Institute of Development Studies attributes the high unemployment rate among graduates to the state’s higher Gross Enrolment Ratio (GER) in higher education, which is nearly double the national average. He notes that many young people in Tamil Nadu are turning to gig economy jobs, such as food delivery, while they wait for better opportunities.
Despite Tamil Nadu's high female workforce participation, wage disparity remains a concern. Kalaiyarasan points out that women in regular jobs earn significantly less than men, with a monthly wage gap of Rs 12,969 for women versus Rs 17,476 for men in 2020-2021.
Srivats Ram, Chairman, Confederation of Indian Industry (CII) Tamil Nadu State Council, emphasizes the need to address the skills gap among recent graduates. He warns that rapidly changing technology sectors make it challenging to train workers effectively. Ram also highlights the need for skilling initiatives, especially as the IT industry matures and job growth slows.
The state government’s Naan Mudhalvan scheme, aimed at creating entry-level jobs, has been praised, though experts suggest expanding its scope and involving more firms. The scheme's efforts are complemented by the government's collaboration with educational institutions to update curricula and establish Industry 4.0 technology centers across the state.
The employment landscape in Tamil Nadu is expected to see significant growth in sectors such as electronics, automobiles, electric vehicles, and solar cell manufacturing, with more than one lakh jobs projected in the coming years, particularly in smaller cities and towns like Krishnagiri, Hosur, and Coimbatore.
However, concerns remain about disparities in job opportunities between urban and rural areas, with rural regions often lacking the infrastructure and investment needed to generate jobs. Additionally, the rise of automation poses a potential threat to job security in certain sectors.
K. E. Raghunathan, National Chairman of the Association of Indian Entrepreneurs, stresses the need for industry and educational institutions to work together to address the skills gap. He suggests considering an additional semester of practical training for graduates, similar to medical courses, to better prepare them for the workforce.
(The Hindu)
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