Events & Issues
New Delhi, 23 May
2018
India’s Job Crisis
TACKLE RURAL-URBAN DIVIDE
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
(Copyright, India
News & Feature Alliance)
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