Open Forum
New Delhi, 13 February 2019
Severe Unemployment
GOVT DENIAL IS OF NO HELP
By Dhurjati Mukherjee
Notwithstanding
claims of the Modi government on having generated jobs given the ‘vast
development’ that has taken place, a recent report reveals that unemployment
rate is predicted at 6.1 per cent, possibly the highest in 45 years with urban
unemployment peaking to 7.8 per cent. The report particularly has found that youth
unemployment was at ‘astronomically high’ levels of 13 to 27 per cent.
And while the Government
chooses to deny the figures and refuses to release the official data, most
experts believe that there can be no denying that there is serious job drought
in the country. The situation becomes further complex with two members of the
National Statistical Commission (NSC) having resigned recently for not making
the report public. The situation does warrant a serious introspection by the
government.
Plus, though sources
point out that the report has not been vetted by the Cabinet, Pronob Sen,
former Chief Statistician and Ex-Chairman, NSC, stated that there is no system
of getting government approval for such surveys and the government has never
approved such reports. The question to be asked is then why undertake a study
in the first place? Obviously, the Government is worried that putting its stamp
on the report will expose its failure on the job-crunch front existing in the
country.
While politicians
talk about high GDP figures, is it not a problem if this does not match
employment rates, so very essential in a country with rising educated youth
population? One can easily state that job creation has not kept pace with the
country’s GDP growth over the decades. In fact, a recent report on the State of
Working India 2018, a report by the Azim Premji University, comes as a damper
on the euphoria generated by India’s improved position in the World Bank’s
latest ease of doing business rankings. A section of economists admit that GDP
growth has hardly any correlation with job creation and that, if anything,
several periods witnessed an inverse relation between rates of GDP growth and
employment growth.
The report pointed
out: “It is also worth noting that a rise in the productivity of labour, or the
amount of value generated per worker, implies a faster GDP growth than
employment. Higher growth has raised aspirations but failed to generate the
kind of jobs that will allow people to fulfil those aspirations”.
Most jobs, as is well
known, are created in the micro, small and medium enterprises sector. This
sector has not done quite well since demonetisation as also the imposition of
the goods and services tax greatly affected the small traders.
In the early 1980s, a
sum of Rs 1 crore of real fixed capital (in 2015 prices) supported around 50
jobs in the organised manufacturing sector. By 2010, this had fallen to 10
jobs, the report pointed out. Presently, estimates reveal that this may have
further gone down to 8 jobs. Obviously this is due to the increase in the use
of imported technology in production or service provision. Moreover,
outsourcing and hiring of contract services may also be a factor.
Some misleading
estimates by politicians, obviously belonging to the ruling party have tried to
negate the well-known fact about job drought. A few months back, a Union
minister of state had argued in an article in a national daily the jobs are
becoming highly knowledge intensive and this has been impacting employment
patterns in the country. Moreover, quoting Nasscom, he showed creation of jobs
in four core areas -- automotive,
IT-BPM, retail and textiles between 2014 and 2017 of around 1.4 crore new jobs.
One cannot deny that there has been some employment in sectors such as IT,
tourism, construction etc. but this is far below earlier achievements and also
does not match current demands.
In such a scenario,
the all-round job drought that is manifest is undoubtedly a disturbing trend.
Moreover, the salary for those entering the private sector has not kept pace
with costs of living and inflationary trends in most sectors. While white
collar jobs are very few with low salaries, even qualified engineers have to
start at a relatively low remuneration.
According to reliable
sources, an internal document titled ‘Jobful
Growth – How to Achieve It in 2019-2024’, prepared by the Rajiv Gandhi
Institute of Contemporary Studies, charts a road map for creating 70 million
jobs in the next five years and this has reportedly been submitted to the
Congress president. This represents a compounded annual growth rate of 3.2 per
cent per annum for employment as against an estimated 0.8 to 1.2 per cent in
the past eight years. As per the document, there are 29.4 million people
looking for jobs at present and that another 40.7 million people will enter the
job market between 2019 and 2024. One cannot deny the fact that the paper has
obviously been drafted by experts after much deliberation and should go a long
way in tackling job drought.
However, this would
require not just political will but massive resources mainly geared towards the
rural and semi-urban sectors, where infrastructure development could lead to
employment generation. Moreover, thrust on labour-intensive industries, especially
in the micro and medium sectors, as also entrepreneurship could achieve a part
of the desired goal.
The situation has
reached alarming proportions and urgent action is called for. It has been
pointed out repeatedly that the thrust of planning should not be towards high
GDP growth but towards inclusive development that caters to the maximum number
of people. Obviously, the decentralised approach, as enunciated long back by
Mahatma Gandhi, has to be followed to ensure that development takes place at
the grass-root level with participation of the common people.
The thrust has to be
on the rural sector where infrastructure development, both physical and social,
would generate jobs and rejuvenate the ailing village economy. The right utilisation
and allocation of resources is the need of the hour and cannot be wasted on in
fructuous work like building statues, bullet trains, building attractive
airports as per international standards etc. It has to be understood that if Rs
20 is spent for the affluent, at least Rs 50 has to be spent on the poor and
the impoverished and also the economically weaker sections, which constitute at
least 65 per cent of the population. Regrettably
this has not been done over decades.
At this juncture,
there has to be concerted action to tackle the problem through specific
programmes. Skill development on a large scale has, no doubt, been a positive
step but efforts have to be made to ensure employment or self employment at
least for 50 per cent of those who successfully complete the training.
Finally, it needs to be
kept in mind that unless the young generation is involved in productive
activities there is every possibility that social conflict would intensity,
landing the country in a crisis situation. Thus, the government has to take all
possible steps to ensure self employment as also focus on areas which could
generate adequate employment opportunities. Mere words will not help. Worse, it
adds a huge burden for the new government, which takes over post General
Elections.---INFA
(Copyright, India
News & Feature Alliance)
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