Unveiling India's Economic Ascendancy: Exploring Sustainable Development Goal 8's Impact on Labour Market Dynamics and Challenges

Abstract

SDG 8 aims at inclusive economic growth, quality job creation, combatting forced labour, ensuring workplace safety, gender equality, fair wages, and SME support. Despite efforts, progress towards SDG 8 targets remains slow, reflecting persistent concerns like precarious employment and limited social discourse avenues. This article discusses India's robust economic growth, solidifying its global economic prominence. It examines the role of Sustainable Development Goals (SDGs), especially SDG 8, in addressing labour market challenges like informal employment and inadequate social safety nets.

Introduction

India’s economy has experienced significant growth over the past few decades, making it one of the fastest-growing major economies in the world. Recently, the economy clocked a growth rate of 8.4% in the last quarter of 2023, which underscores India’s potential as a global economic powerhouse, fuelled by a thriving services sector and policy initiatives. The Sustainable Development Goals (SDGs) were adopted by all United Nations’ 193 Member States in 2015 as part of the 2030 Agenda for Sustainable Development. The 17 SDGs were built on the successes of the Millennium Development Goals (MDGs) while addressing the shortcomings and aimed to craft a more comprehensive approach to sustainable development. India encountered obstacles in attaining quality employment due to widespread informality, insufficient social safety nets, and incomplete data on job attributes.

Sustainable Development Goal 8 strives to foster long-term, inclusive economic growth and ensure decent work opportunities for everyone. It focuses on generating employment, boosting productivity, and providing social protection. The goal also aims to eliminate forced labour and human trafficking, ensuring safe workplaces for all, including migrant workers. Gender equality and fair wages are integral alongside policies that promote sustainable tourism and support small and medium-sized businesses. The labour market revealed concerns such as precarious employment, uncertain income, and restricted avenues for social discourse. Despite efforts, SDG 8 advancements toward focusing on decent work and economic progress could be more active as per the SDG India Index for 2020-2021.

Ambiguity in Defining 'Decent Work': Insights from ILO's Programme for India (2023-2027)

The ambiguity lies in the use of the terminology-“decent work”. What is decent for one country may not be decent enough for another country. Concurring with a universal definition of decent work diminishes the gravity of the question altogether. The recent publication by the International Labour Organization (ILO) on the Decent Work Programme for India (2023-2027) highlights the importance of enhancing work institutions for comprehensive worker protection, fostering long-term, inclusive, and sustainable economic growth, employment, and decent work opportunities, and building the capability of all individuals to seize advantages in an evolving work landscape.

The strategy prioritizes strategic objectives and their alignment with the SDG framework and the United Nations Sustainable Development Cooperation Framework (UNSDCF). It targets overcoming obstacles to decent work, including widespread informality and insufficient social safety nets. Special attention is given to creating supportive conditions for marginalized and vulnerable workers. The strategy aligns with the UNSDCF's pillars on people, planet, and participation. It involves collaboration with key stakeholders such as the International Labour Office, the UN Resident Coordinator in India, and the Ministry of Labour and Employment in India. Workforce diversity, equal opportunity, and inclusive growth are highlighted as crucial elements in accomplishing organizational goals concerning SDG 8.

India’s progress in SDG 8

Recent data from the Ministry of Statistics and Planning Implementation (MoSPI) underscores the resilience of India's economy, even in the face of the COVID-19 recession. Despite the challenging circumstances, India's GDP growth, while registering an all-time low of (-)6.8% for the year 2020-21 [Figure 1 in Appendix], is a testament to the country's ability to bounce back.
According to the National Indicator Framework on Sustainable Development Goals Report (2023), the total number of patents in India issued increased from 6,326 in 2015-16 to 34,134 in 2022-23, which complies with Clause 8.2.2 of SDG Goals. The rise in patent issuance in India offers myriad advantages such as it spurs innovation by encouraging investment in research and development, contributes to economic growth by fostering new industries and job opportunities, grants businesses a competitive edge through legal protection of inventions, aiding market presence and investment attraction; enhances knowledge sharing as patents mandate public disclosure of inventions, aiding further advancements. This trend reflects a vibrant, innovative economy with potential gains in growth, job creation, competitiveness, and knowledge dissemination that are to come in India.

SDG Goal 8.3 in India aims to encourage policies that boost productive activities, create good jobs, foster entrepreneurship, and drive innovation, especially for micro, small, and medium-sized enterprises (MSMEs). This goal is to ensure that everyone has fair access to meaningful employment and decent work opportunities regardless of their background.
The Employees' State Insurance Act (ESI Act), 1948 is a social security law that applies to factories with ten or more employees and is implemented gradually by region. It allows for extension to various establishments, including shops, hotels, cinemas, educational institutions, and more, employing ten or more individuals. The Act covers employees earning up to Rs 21,000 per month and Rs 25,000 for persons with disabilities. Currently operational in 35 States/Union Territories, the scheme covers 3.10 crore insured persons and 12.04 crore beneficiaries as of March 31, 2022. With more beneficiaries under the coverage of the ESI Act, better India is equipped to promote decent job promotion as highlighted under Clauses 8.3.2 and 8.8.1.

Startup India, a programme initiated by the Indian government, supports entrepreneurship with incentives like easier registrations, tax benefits, and funding. It fosters a startup-friendly environment and promotes business ease, risk-taking, and partnerships, aiming to boost economic growth, jobs, and technology by empowering startups to succeed. The number of startups recognized under Startup India significantly increased to 34,779 in 2022-23 from 503 in 2015-16, crossing the 1,00,000 threshold in December 2023[Figure 2]. This shows that the Clause 8.3.5 is being adhered to in India.
According to the Periodic Labour Force Survey data, the percentage of people employed in the manufacturing sector showed an increase in employment by 8% in the fiscal year 2021-22 compared to the previous year. Under Clause 8.2.3 of SDG 8 India-Framework, India must achieve higher economic productivity through diversification and technological upgradation. Over time, the manufacturing sector has consistently demonstrated growth if we consider the last ten years [Figure 3].

Conclusion

The Government's Startup India initiative supports Indian entrepreneurs. Complementing this, the Micro Units Development and Refinance Agency (MUDRA) has played a pivotal role in providing low-rate loans, particularly benefiting Micro, Small, and Medium Enterprises (MSMEs) by significantly improving their access to credit. Under the MUDRA scheme, the number of outstanding credits to MSMEs stands at 20,11,056 in 2021-22, up from 12,16,007 in 2015-16, a clear testament to the scheme's success in promoting developmental activities under Clause 8.3.9.[Data source: Ministry of Micro, Small, Medium Enterprises]. These efforts are part of broader structural reforms in India aimed at fostering sustainable economic growth and creating productive employment opportunities. Notably, the number of patents granted and startups getting recognized by the State has seen a consistent rise. The initiative encompasses 12 targets to ensure decent work opportunities and foster economic growth within societies. To gauge progress, 24 national-level indicators have been identified, with data available for 23 indicators, allowing for ongoing measurement and monitoring of the goal's achievement.
India's progress towards Sustainable Development Goal (SDG) 8, emphasizing sustainable economic growth, employment, and decent work, is marked by many initiatives aiding entrepreneurship and small enterprises. Nevertheless, informal work, skills gaps, and regional disparities persist, necessitating ongoing innovation, job creation, and socio-economic equity efforts for India's comprehensive benefit and an inclusive future for all its citizens.

References

 Behind rising manufacturing employment. (2023, April 1). The Financial Times. https://www.financialexpress.com/opinion/behind-rising-manufacturing-employment/3029195/
Ara, S. (2021). CHALLENGES OF DECENT EMPLOYMENT IN INDIA. Indian Journal of Finance and Economics, 2(2), 163–185.
Incorporating SDG 8 for decent work Practices: A study of MNC subsidiaries in India. (n.d.). AABFJ, 15(5).
From “Decent Work and Economic Growth” to “Sustainable Work and Economic Degrowth”: A new framework for SDG 8. (2022). Empirica, 281–311. https://rdcu.be/dJsXS

International Labour Organization. (2020). Decent Work Country Programme for INDIA(2023-2027).
Rani, Deepika Chahal and Anju. (2021). Productive and Decent Work Employment Opportunities: Reflections of Sustainable Development Goal 8. Space and Culture, 11(4).
SDG 8: Decent Work and Economic Growth – A Gendered Analysis. (2019). World Development, 368–380.

Appendix:

Figure 1: The per capita growth in the year 2021-2022 was able to meet the criterion set by the SDG Framework, unlike other years.
Source: Ministry of Statistics and Planning Implementation(MoSPI), National Accounts Division.

Figure 2: The number of startups recognized has been on the rise.
Source: Department of Industrial Policy and & Promotion, Ministry of Commerce and Industry.

Figure 3: The continuous increase in the manufacturing sector.
Source: Ministry of Statistics and Planning Implementation(MoSPI), Annual data.