India’s Job Crisis
By Dhurjati Mukherjee
The debate on ‘jobless growth’ has greatly embarrassed the government. That there is an employment crisis cannot be doubted and experts at the highest level have seriously been considering a remedy.
India needs to create 81 lakhs jobs a year to maintain its employment rate, according to a World Bank report which projected the country’s growth to accelerate to 7.3% in the current financial year. It has projected this rate to increase further to 7.5% in the next two years. The report also states that India has recovered from the withdrawal of large denomination bank notes in November 2016 and the implementation of Goods and Service Tax (GST) on July 2017.
In its twice a year ‘South Asia Executive Focus’ titled ‘Jobless Growth’, the Bank observed that the area has regained its lead as the fastest growing region in the world, supported by recovery in India. It suggests that New Delhi should strive to accelerate investments and exports to take advantage of the steady recovery in global growth.
Since India is growing at around 6.5 to 6.8% or even more, one would think that job growth should be at least as much, ideally more and that’s not happening. If one looks at the organised sector, it’s around 60 million or only 12 to 13% of the workforce.
Delving into another statistics, as projected by the Centre for Monitoring Indian Economy (CMIE) in February 2018, 31 million people were seeking jobs in the country. This is the highest number since October 2016. In response to a question in Parliament, the concerned minister quoted a recent International Labour Organization (ILO) report that projected the number of unemployed persons is expected to rise from 18.3 million in 2017 to 18.6 million in 2018 to 18.9 million in 2019.
In such a situation, obviously India needs one million new entrepreneurs over a 10-20 year time frame. It sounds impossible when one looks at the historical base. The number of start-ups over the last 10 years, the ones that are still alive is around 10,000 job and they only create 100,000 jobs. The average number of jobs per start-up is around 10.
Another aspect is that if you are a self-employed person, you may call yourself a business but it’s highly unlikely you will grow into a 25 person or a 100-person firm, which is where the bulk of job creation will happen. Thus, even with growth of micro units by professionals the prospects of the situation changing appear quite unlikely.
The state of affairs in the country is indeed quite alarming with the backlog of ‘surplus workers’ that includes underemployment in all sectors, as per the India Employment Report 2016, exceeding 50 million workers and this does not include women. The reason may not be due to the stagnancy in the GDP growth, but also due to the fact that unemployment and underemployment has been increasing with rural incomes completely stagnant.
Added to this is a virtual stagnant agriculture with reports of farmers’ suicides, indicating once again that farming is becoming an unremunerative proposition. Technical know-how has been missing, crop losses are rampant and in most areas with irrigation facilities three crops are not possible. It is time to decide whether manufacturing — and subsequent export — or agri development and exports should be our priority or whether a balance of both is necessary.
Speaking from an economic point of view, it is erroneous to believe that with high GDP growth, there would be simultaneous employment generation. While automation has curbed job creation, the other factor that has been an impediment is the lack of high skilled workforce — not graduates or post-graduates who lack professional skills.
Thus there has to be a thrust on labour-intensive industries such as jewellery products, construction, handlooms, travel and tourism, plantation sector etc. One may mention that the Prime Minister could be the best ambassador for Indian handlooms and handicrafts, which have great export potential.
The widening disparity in incomes between sections and rural and urban sectors has to be narrowed down. There has to be an effort to gainfully utilise the work force so that it is not led astray. Unless this is done, social unrest is bound to increase, leading the young generation to anti-social activities. Already the NDA is playing politics with religion, trying to prove Hinduism’s superiority and that this land belonged to the Hindus and whatever good or creative work has been carried out is by Hindus. Earlier and even now caste politics has been rampant. These fanatic activities have become violent in recent times with groups trying to assert authority.
In such a scenario, there is every likelihood that youth, even educated ones, with no jobs may fall into a trap and get misled. Also anti-social activities like armed robbery, rapes and killing may intensify in coming years if social and economic balance in society is not maintained. We do not hear of political leaders lamenting the widening disparity among the rich and poor, between urban and rural sector and the causes and consequences of such development. This is indeed distressing for a country which swears in the name of Mahatma Gandhi and will be celebrating his 150th birth anniversary next year.
It is indeed distressing to note there is no effective plan by the government to tackle joblessness. It is essential to evolve some mechanism to generate employment, directly or indirectly, both in the organised and unorganised sectors. If necessary, academicians from across the country along with Niti Aayog experts should sit together to prepare an action plan to tackle the nagging problem. However, the government embarking on a massive skilling programme and advanced skills programme is welcome as it would ease pressure in future.
Thrust must be laid on developing rural infrastructure with more krishi vigyan kendras (KVKs), industrial facilitation centres, etc. that could provide technological support to help the economy generate jobs at the local level. There is also need to finance warehouses to educated groups of the Block so they could earn a living and where there is potential, agro-based industries must be promoted.
Finally, politicians who are directly or indirectly involved in framing policies should be advised to read Gandhi’s relevant part of economic philosophy and prepare a plan accordingly. Unless a new policy is framed to revive the rural sector through cottage and small enterprises in different locations in rural and semi-urban areas with special incentive on labour-intensive units, the situation would indeed turn grim. Further, agriculture must be revived with technological support, as it would help tackle job crisis and the process of true economic revival and balanced regional development, as visualised by Gandhi. Mere talk and jargon is of no use. —INFA