Refocus On Jobs
By Shivaji Sarkar
It may be imperative on Finance Minister Nirmala Sitharaman to refocus the Union Budget from possible populism, an election-time compulsion, to professionalism, creating jobs everywhere. The trigger should be two different recent incidents, tragic and problematic.
One, a family of four from Gujarat chasing “better” jobs freezes to death in the US. The other is the growing protests over railway jobs in Bihar and Uttar Pradesh for roughly 40,000 vacancies—a grim reminder of the state of India’s job market. Let not Bihar and UP emerge as ticking social bombs for the sheer size of the unemployed.
The unemployment rate rose to a four-month high to 7.9 per cent in December 2021. It stood at 7 per cent in November last year and 9.1 per cent in December 2020. But jobs were shrinking even before that in 2019 and earlier. The World Bank says that India has the highest total unemployment rate at 21.01per cent for the 15-24 year-old population.
The NSSO’s 2017-18 data stress is that actually the job situation is grimmer. The overall rate of open unemployment (as opposed to under-employment or disguised unemployment) had risen sharply after 2011-12. That has been proven in the NSSO numbers. Former Chief Economic Advisor K Subramanian stresses that it is not employment but “The key aspect is meaningful employment”. The 2017-18 unofficially leaked NSSO data revealed that the unemployment rate was never over 2.6% between 1977-78 and 2011-12. But it had jumped to 6.1 per cent in 2017-18. Now it touches 9 plus percent.
The jobs have to be the priority in a country where the number multiplies every day. The Covid-19 lockdown is the immediate cause. Blaming any government for this criticality is not wise. As a nation somewhere the political parties are found to be clueless. The NITI Aayog supposedly tasked to recommend like its predecessor Planning Commission, is not apt in hitting the nail.
The situation has been aggravating and the country is resorting to welfarism – one slips into an abyss and he is provided free food for sustenance; instead of development – making the man once rescued self-sufficient in income terms to add to his own and country’s economy. The Narendra Modi government has shown enough empathy with free food dole and MGNREGA jobs to keep the people afloat. Now it has to move beyond welfarism doles so that the country takes a leap to better life.
The previous budgets came up with entrepreneurship, Skill India, MUDRA and similar other schemes. These did not fulfill the objectives. Partly the concept of unicorn has succeeded. Overall the jobs remain scarce and low paid.
The Gujarati family was apparently well off with a teacher’s job and sundry other chores. It could pay $ 2.5 lakh for their dream travel through agents for illegal entry to the US. What sparked them like many Gujaratis and Punjabis rushing to El Dorado may be the flashy “lifestyle”. In 2007, Babubhai Katara, MP was caught trying to smuggle out carrying a Punjabi woman and her son as his own for Rs 30 lakh to the US. His party suspended him.
What triggered Bihar and UP problem is lack of job. Once private sector jobs were considered well-paid. The Seventh Pay Commission changed that. Now for years the corporate, including the IT, are not creating the required number of jobs. And jobs fetch lower wages and remain insecure.
Interestingly, during Atal Behari Vajpayee’s NDA-I six crore jobs were created. There is a change. Because of economic slowdown during the past many years manufacturing has suffered. The index for industrial production remains at a low. Educational qualifications have improved causing an aspirational problem. There were 70 million such persons in 2004-05 but increased to 115.6 million by 2017-18. They are growing by about 5 million a year, according to Santosh Mehrotra, Professor of economics, Centre for Labour. He says what is most worrying is that manufacturing jobs actually fell in absolute terms from 58.9 million in 2011-12 to 48.3 million in 2015-16, a whopping 10.6 million over a mere four-year period.
Bihar has about 13 per cent unemployment. The state of UP has 5.41 per cent unemployment in May-August 2021 against 3.75 per cent in March 2017. Rightly UP Chief Minister Yogi Adityanath says that he would create more jobs.
Indeed, the job strategy has to change. An interesting aspect is that because of the Narendra Modi government’s less interference in PSU operations, even in the difficult Covid times 171 PSUs continued to have good profits despite better salary structure. This indicates that proper salaries could be paid even during crisis period and profits could be sustained. It also calls for reviewing the PSU disinvestment policy. The world has seen the failure of the global private sector for unethical practices since 2007-08 Lehman meltdowns.
The Finance Minister may open a new leaf. India has thrived with a mixed economy. The PSUs have the capacity to start a competitive economy that the private sector abhors. No national economy can thrive without competition within. Monopolised private or public sector would cause inbreeding, leading to poor performance. She has to be innovative enough to help create rural farm and non-farm jobs that make the rural economy viable and lifestyle attractive to stem rural migration.
Post lockdown it would be wait and watch situation for the private sector, says Vikas Chadha, MD, Global Outsourcing. Sitharaman has to observe global practices, particularly sharp Chinese economic policies, European backlash against China and possible escalation of western sanctions against Russia. These would be important to create India-centric policies to increase jobs in different sectors.
Private sector also has a tendency to employ less and pay less. If jobs are to be a priority this policy has to be given up. The PSUs can deliver here creating a situation where private sector also would have to pay just wages, may be to their dislike. The Finance Minister has to think in terms of nation’s growth and a promised $5 trillion economy. In the new scenario, she has to involve and inspire the Indian private sector to create quality jobs and make them capable of competing with their international rivals.
The FM has to have sharp job-creation strategy to initiate the steps to boost urban, rural, private and public employment. This helps India accelerate its growth pace with larger participation of the population and become cynosure of the new world economy. — INFA