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Severe Unemployment: GOVT DENIAL IS OF NO HELP, By Dhurjati Mukherjee, 13 February 2019 Print E-mail

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New Delhi, 13 February 2019

Severe Unemployment


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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