Unemployment should be a matter of concern

While there is cause for satisfaction at the overall 7 per cent growth of the Indian economy, the jobs scenario is far from comforting and should worry the Narendra Modi government which had come to power on the promise of cutting down on joblessness. According to a recently-released report of eight key sectors of the non-farm economy, compiled by the Labour Bureau of the Central government, jobs increased by a paltry 1.1 per cent in 2016. That this is happening despite various new initiatives is particularly unnerving. A total of 2.3 lakh jobs were added to the eight sectors – manufacturing, construction, trade, transport, accommodation and restaurants, IT/BPO, education and health – during the period April 2016 to January 2017, half of these in education and healthcare where salaries are low. On the other hand, construction and the hospitality sectors showed loss of jobs. The slowdown in the IT (information technology) and BPO sectors has hit the jobs scene hard. Global slump in IT services and components and new visa restrictions have added to the woes of this sector. The middle class which was riding the IT boom has suffered badly.

The Labour Bureau’s 2016 report also raises alarm on underemployment with growing number of workers not finding work for full year. Only 61 per cent of the workforce was found to have year-round jobs with 34 per cent working only six to 11 months even though they were willing to work for 12 months. The report also revealed that 68 per cent households in the eight non-farm sectors were earning less than Rs 10,000 per month. Other figures in the survey were no less disconcerting. Gross credit given to industry grew by just 6.7 per cent in the past three years, the index of industrial production inched up by a mere 6 per cent and growth in gross fixed capital formation slipped to an alarmingly low 0.6 per cent in January 2017 from 6.1 per cent at the same time last year. In the manufacturing sector, while the total number of jobs in 2016 was 205.2 lakh, the increase in April 2016-April 2017 was one lakh which in percentage terms was 0.9. In all other sectors the growth was either marginal or negative. All in all, it was a gloomy scenario which the Central government cannot afford to take without an element of constructive concern.