Job­less in wartime

Like ter­ror­ism, job­less growth continues in In­dia ir­re­spec­tive of who is in power. To tackle it, we need not cross bor­ders

Down to Earth - - CONTENTS - RICHARD MA­HA­P­A­TRA

Job­less growth is a greater enemy of the govern­ment than ter­ror­ism

RE­CENTLY, THE Labour Bu­reau re­leased its find­ings from the an­nual house­hold survey on em­ploy­ment. In­dia’s econ­omy grew at 7.1 per cent in the first quar­ter of 2015-16, one of the world’s fastest. But our un­em­ploy­ment rate is 5 per cent, a fiveyear high.

For a coun­try where more than 65 per cent of the pop­u­la­tion is el­i­gi­ble to join the work­force, it is bad news. Fur­ther, In­dia’s em­ploy­ment sec­tor re­mains highly un­or­gan­ised; only 10 per cent of to­tal em­ploy­ment comes from the or­gan­ised sec­tor. This makes the em­ploy­ment sce­nario more com­pli­cated. But is all this new to us? No.

The trend of job­less growth started in 2004, and still continues. It was in 2004 that the pre­vi­ous Na­tional Demo­cratic Al­liance (nda) govern­ment was routed un­til it came back to power with a his­toric ma­jor­ity in 2014. In-be­tween, the United Pro­gres­sive Al­liance ruled for two five-year terms. The nda led by Prime Min­is­ter Naren­dra Modi has promised 10 mil­lion jobs a year. Af­ter two years in power, his prom­ise seems to be dif­fi­cult to keep. But he was right in 2014 while cam­paign­ing for elec­tions that the decade pre­ceed­ing suf­fered job­less growth. In 2011, the Na­tional Sam­ple Survey Of­fice (nsso) re­leased data on em­ploy­ment. It showed that dur­ing 200405 and 2009-10, only one mil­lion jobs were added per year. Dur­ing this pe­riod, the In­dian econ­omy grew at 8.43 per cent an­nu­ally, a his­toric high.

So how is Modi go­ing to fix this prob­lem? His re­cent ag­gres­sive pos­tures against cross-bor­der ter­ror­ism that in­cluded the much-talked-about “sur­gi­cal strikes” across the Line of Con­trol have not only pro­pelled his im­age as an ac­tion-ori­ented leader but also as some­one who keeps prom­ises. Like ter­ror­ism, job­less growth is also a prob­lem which continues across gov­ern­ments. Po­lit­i­cally, un­em­ploy­ment is more lethal than ter­ror­ism.

That is the rea­son Modi seems to be equally se­ri­ous about job­less growth. In two re­cent tele­vi­sion in­ter­views, he spoke about em­ploy­ment and job­less growth. In his typ­i­cally op­ti­mistic style, he de­clared that his re­cent em­ploy­ment-cre­ation pro­grammes would lead to more jobs. These in­clude: Start up In­dia, Dig­i­tal In­dia, the mu­dra or Mi­cro Units De­vel­op­ment & Re­fi­nance Agency Ltd. scheme, Make in In­dia (for the man­u­fac­tur­ing sec­tor), and boost­ing in­fra­struc­tures that cre­ate jobs. In all these pro­grammes he sees eco­nomic growth trick­ling down and cre­at­ing jobs. But will these pro­grammes help cre­ate jobs pro­por­tion­ate to eco­nomic growth?

Op­ti­mism is not al­ways a good guide for the econ­omy. Not just in In­dia but also across the globe, the em­ploy­ment cre­ation po­ten­tial of Gross Do­mes­tic Prod­uct is com­ing down. Still, In­dia’s em­ploy­ment elas­tic­ity is least in the world, ac­cord­ing to Arun Maira, mem­ber of the erst­while Plan­ning Com­mis­sion. Ac­cord­ing to his re­cent blog post, it has been less than the global av­er­age from 2000 to 2010. The av­er­age em­ploy­ment elas­tic­ity of the global econ­omy was 0.3 in this pe­riod, while In­dia’s was only 0.2, he wrote. Although there are var­i­ous rea­sons for this, the most im­por­tant one is au­to­ma­tion of eco­nomic ac­tiv­i­ties in key sec­tors. Add to it, the un­equiv­o­cal fo­cus on cre­at­ing jobs from only in­dus­trial/ser­vices sec­tors and ig­nor­ing tra­di­tional sec­tors like agri­cul­ture which still cre­ate the max­i­mum em­ploy­ment in the un­or­gan­ised sec­tor.

This means Modi has to shift the fo­cus from pro­grammes al­ready in place to cre­ate jobs and ab­sorb the de­mand of 12 mil­lion peo­ple join­ing the work­force ev­ery year in In­dia. Agri­cul­ture may be stag­nat­ing, but its em­ploy­ment po­ten­tial re­mains high. Padded with al­ter­na­tive jobs at vil­lage level, it will sub­stan­tially in­crease em­ploy­ment in vil­lages, where the max­i­mum de­mand for jobs will emerge. So, it is all about re­think­ing the job cre­ation for­mula in­stead of rein­vent­ing it. For this, one need not cross the bor­der; just think in In­dia.

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