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BW Businessworld

Unemployment : The Crisis Of Jobs

Unemployment as usual, is a screaming poll issue.BW Businessworld holds a looking glass over the jobs strategies promised in the Congress Party’s manifesto

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During an election rally in Agra on November 22, 2013, Narendra Modi as the   prime ministerial candidate of the National Democratic Alliance (NDA) had made a real big commitment. Modi had said that should the Bharatiya Janata Party (BJP)-led NDA come to power, a crore jobs would be generated every year. As Modi’s government seeks a mandate for a second term, that promise remains unfulfilled.

It is after all election season and the Indian National Congress (INC) and its United Progressive Alliance (UPA) allies have consequently lost no opportunity to remind the electorate of Modi’s unfulfilled promise. Rajeev Gowda, a Congress Member of Parliament (MP) and an economist, pegs the number of the jobless in India at a mind-boggling four crore. “There are four crore unemployed people in India within four years  thanks to the policy intervention of the NDA’s great economists like Modi and Jaitely,” he says sarcastically.

National spokesperson of the INC, Randeep Singh Surjewala, tells BW Businessworld that “Under the able leadership of our party president, Sonia ji and economists like Manmohan Singh ji, we have planned to make India a Rs 400 lakh crore economy. Should the economy be on that scale, there will certainly be multiple job opportunities and unemployment will fall considerably.”

Gowda emphasises that the Congress Party was committed to creating 24 lakh jobs by March 2020. “Jobs are already sanctioned and there are many potential employees for them, we just need to select the right people for right job,” he tells this writer.

The Congress way  
The Congress Party’s manifesto for the 2019 national general elections gives top priority to unemployment. The manifesto says: “Unemployment is the gravest challenge to the country and job creation is the highest priority for the economy. In the last 5 years, there has been a dramatic rise in unemployment. Today, unemployment is touching a 45-year high of 6.1 per cent according to the government’s own figures. The Centre for Monitoring Indian Economy puts the number at 7.2 per cent.

At the end of this February, 3.1 crore people were actively looking for jobs. Data indicates that total employment has declined, the labour participation rate has declined and existing jobs have been destroyed. Every section of society has been affected by growing unemployment and the destruction of existing jobs: youth, families, women, small business persons, traders, farmers, daily-wage workers and agricultural labourers.”

Ironically, a World Bank Group report titled Pathways to better jobs in international development agency (IDA) countries reveals that approximately 40 per cent workers work less than 35 hours per week, because of the low demand for labour. Economic growth has not always created the right jobs for the expanding workforce in the poorest countries, the study says. The report reveals that 12 per cent of the growth episodes in the world since 1992, had in fact, come with job losses.

“This has certainly a lot to do with a larger trend, a trend world over,” says Gowda. “This has come with machine learning, AI and other technology aspects that had replaced certain kinds of jobs. For example call centres have lost the importance they had a couple of decades earlier in the emerging economy. We need to anticipate it and look at ways where job creation and growth can go hand in hand,” he says. In the meanwhile, will the jobs come at the cost of economic growth?  

The NDA story
A study titled Comparison of period of the UPA government and NDA government by the Institute of Objective Studies in New Delhi shows a 12.56 per cent growth in employment levels in 2009, when Prime Minister Manmohan Singh was at the helm of a UPA government (please see table: Change in employment in selected sectors). Lakshmi V. Venkatesan, Founding and Managing Trustee of the Bhartiya Yuva Shakti Trust is convinced though, that the number of the unemployed had doubled to two crores in 2013 from a crore in 2003.

By 2015 the growth in jobs seems to have tapered down to 1.35 per cent, ostensibly belying the promise made by Narendra Modi before the 2014 elections  ostensibly, because Labour Bureau statistics show job creation or job growth for 2015 at 1.35 lakh Jobs available increased further to 2.31 lakh in 2016 (April to December).  

Statistics of the Institute of Objective Studies lends heft to the Congress Party’s focus on employment in its election manifesto. Former Planning Commission member, Abhijit Sen says, “The BJPs manifesto does not talk about the economy as a core subject, while the Congress has touched upon such issues.”  

The Planning Commission Databook 2014 shows an improvement in almost all spheres during the first five years of the UPA’s tenure, be it in terms of the labour force or fall in unemployment levels. It depicts an increase of 18 million jobs between 2004-05 and 2009-10 – a laudable achievement in a span of five years. Has the NDA been able to replicate it?  

In its defence, the BJP points to the startup story, which too has led to a growth in jobs, if only in small and medium-scale ventures. During a recent interaction with media, Prime Minister Modi said, “What about those six crore people who took Mudra loans to start their trades? They must have employed at least one or two, taking up the number of jobs created to more than 12 crores.”

A government release of 1 August 2018 says, “Under Pradhan Mantri Mudra Yojna (PMMY), the number of accounts or number of loans sanctioned during 2015-16 to 2017-18 were 12.27 crore, of which 3.49 crore were new entrepreneurs. The overall performance report of the PMMY for the 2017-18 financial year shows that some ten crore (10,07,72,960) accounts had benefitted from the scheme, all of which have hopefully employed people for the startup ventures.      
The primary focus of the Congress will be to create four lakh vacancies in the Union government and to entice the state governments to create another 20 lakh job vacancies. Devolution of funds to the states for critical services like healthcare, education, the Panchayat’s and the municipalities will be conditional and linked to creation of  jobs.

Rural employment is a sticky issue in India, particularly because the bulk of the population still lives in the countryside, where agriculture and allied activities continue to be the primary source of livelihood. The boom in agricultural production is among the success stories of the NDA regime. Ironically, high farm productivity, actually escalates joblessness in the countryside, as higher yields turn a lot of the farm labour redundant.

A series of bumper crops during the reign of the NDA have therefore, accelerated the rate of rural unemployment. Congress leader Gowda has a solution for the problem. “We have planned two major schemes for rural jobs for water body restoration and afforestation, this can create more than one crore jobs. Apart from it, non-agriculture jobs like fruit, vegetables and meat processing is also our agenda”.

Taking a leaf out of its MGNREGA experience, the Congress proposes to generate a crore jobs through two major programmes involving Gram Sabhas and urban local bodies. “Gram Sabhas and urban local bodies will create a crore jobs with the help of the water body restoration and wasteland regeneration missions,” explains Gowda.

Jobs versus skills 
Among the interesting nuggets in the World Bank report referred to earlier, is a reference to a common syndrome. Most people work, the report says, because they cannot afford not to, implying a complete absence of any linkage between jobs and inclination or skills. It is possibly the most scary finding on employment. “Skill development is one of our long-time priorities and our effort will be to train for mass entrepreneurship programme as well,” assures Gowda.

The INC election manifesto refers to the need to create unskilled jobs. The manifesto reads: “We recognise the need to create lakhs of low skilled jobs in order to absorb young men and women who have completed only a few years in school.” Another focus of the Congress should it form government in 2019, will be to redefine micro, small and medium scale enterprises (MSMEs). The MSMEs will be defined not on the basis of their capital, but the labour force engaged in them. “The flow of the credit to MSMEs will be a key aspect, but not the only one,” explains Gowda.

A vast population resides in the tier-2 and tier-3 cities, where the Congress would like to give shape to the concept of mass entrepreneurship. “Congress will promote ‘Mass Entrepreneurship’ and support entrepreneurs to replicate tried and tested models of businesses in order to meet the growing demand for such goods and services,” the party says in its manifesto.

“The Congress Party’s job focus can’t be specifically called ‘jobs’,” muses Abhijit Sen. “It either opts for a particular structure of growth or job specific programmes,”  he says. Meanwhile, other academics like Lakshmi V. Venkatesan worry of “a global youth unemployment crisis”. India’s condition, she says “is serious”. What happens then to the purported “four crore” by the wayside, basking in that ‘magic feeling’ the Beatles sang of in times of hopeless joblessness, of having ‘Nowhere to go!’

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General Elections 2019 manifesto

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