Economic Highlights
New Delhi, 31 January
2022
Refocus On Jobs
MUST BE BUDGET PRIORITY
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
(Copyright, India News & Feature
Alliance)
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