Hope and anxiety among liberalization’s children
An open economy spurred growth and created a generation of aspirational millennials, but provided few avenues to follow these dreamsThe cruelty of their situation is exacerbated by the fact that as a whole, millennials are better educated than previous generations
PremiumWhenever I discuss my research on Indian millennials, most people assume that I’m talking about the social-media addicted youth they see in Delhi or Mumbai, glued to their smartphones and in pursuit of instant gratification. While that image might fit a very small minority of millennials, reality tells a starkly different story.
Born between 1981 and 1996, millennials grew up in an India in the midst of rapid social, cultural, and economic change. The forces of economic liberalization, introduced in 1984, but unleashed in 1991, changed the nature of the Indian economy and ushered in unprecedented levels of foreign investment, which is why we are told that liberalization ‘transformed’ India.
But as I’ve spent the last two years essentially camped out in India’s small towns and cities, my assumptions on the advertised benefits of liberalization have been fundamentally challenged. Textbook economic theory of greater investment, an increase in white collar jobs, and the entry of multinationals appears to have limited weight and impact outside India’s metropolitan cities. And for older millennials—born in the early 1980s and now on the other side of 35—while liberalization encouraged incredible aspirations and the promise of opportunity, the avenues to pursue them were few.
I see this most clearly in my field work in Madhya Pradesh. In the winter of 2018, I spent weeks in the state during its assembly elections. As I travelled to town after town, one sight had become eerily familiar to me: hordes of young and middle-aged people, mostly men, spending their time at public squares, seemingly unemployed and disengaged from economic activity.
Jabalpur is considered one of Madhya Pradesh’s economic centres. At the time of independence, it was a vibrant industrial hub of central India, and is still home to one of the government’s largest ordnance factories. I expected to find a thriving working class population given the city’s history as a manufacturing hub. Instead, I encountered a city of more than one million people in decline. As I shadowed local candidates canvassing for votes, the biggest issues raised to me were the ongoing agricultural crisis and unemployment. The youth I met broadly came from two groups: rural labour who were not currently needed on the farm, and contractual workers who were laid off due to the economic downturn. Both were casualties of liberalization.
Today’s Jabalpur is a shadow of its former self, largely because liberalization created disproportionate growth in the services industry—encouraged by globalization-fuelled cost arbitrage—instead of manufacturing, which absorbs more people. It is remarkable how the manufacturing sector’s contribution to India’s GDP has remained unchanged since liberalization.
But the cruelty of their situation is exacerbated by the fact that as a whole, millennials are better educated than previous generations. An intensive focus on increasing enrolment at the school level, along with an increase in the access to public and private higher education has created millions of degree-holders who are either unemployed or employed in positions which are not commensurate with their qualifications. Although this labour undervaluation is also a product of the quality of education attained, which leaves a lot to be desired, neither the promise of education nor liberalization has provided them with well-paid and stable employment.
One evening after campaigning had finished, I was at a snack stall where I began talking to the owner, a 32-year-old civil engineer and first-generation graduate. After he was laid off from a construction company four years ago, no one was willing to hire him and he could not move elsewhere because he had to look after his ailing parents. So he opened a snack stall, which sells pakoras, kachoris and tea. After expenses, he brings home about ₹5,000 every month. His wife, a librarian at a private school, makes ₹12,000, which is how the family primarily sustains itself.
“Being an engineer doesn’t mean much. I wish I had applied for a government job instead. I would have at least had a stable income and been able to provide for my family," he told me.
His wife is an anomaly, given women’s participation in the workforce has fallen sharply since 2000. She only works because her husband doesn’t make enough. A World Bank study found that nearly 20 million women dropped out of the workforce between 2004 and 2012, and a Tata Sons-Dalberg analysis estimated that approximately 120 million women in India have a secondary education but do not participate in the workforce. The snack stall owner’s example suggests that their involvement in the labour force can save families from destitution, and the Tata-Dalberg study further found that their employment can add ₹31 trillion, or roughly $440 billion, to India’s GDP, but a variety of structural inequities disable women from joining the workforce: from existing social taboo and gender norms to safety and mobility.
While we often discuss statistics that tell us the Indian economy needs to add one million jobs every month to keep its youth occupied, or that employment needs to grow by 3% every year but has grown at approximately half that number, we forget about older millennials who have families to support and children to educate.
According to government data, the median age at marriage in India continues to hover around 19 years for women and 23 for men, which indicates that the median older millennial is a parent to one or two children. Juggling parental responsibilities with finding or maintaining stable employment in an economy which is shedding jobs has created incredible anxiety among liberalization’s children. The double whammy of women missing from the workforce and the lack of vibrant employment opportunities is the biggest hurdle stopping older millennials unlocking their greatest economic potential.
Although I had gone to Jabalpur to investigate the economic aspirations, social views, and political attitudes of millennials, I was left with more questions. But the biggest one gnawing at me was about the breadth and width of liberalization—since it clearly wasn’t enough.
Aspiration and reality
A few hours away from Jabalpur, in the state’s capital, Bhopal, I met Jalaj Sharma, a 35-year-old money manager. After graduating with a degree in engineering from Mandsaur Institute of Technology, he ignored his government doctor parents who were pleading with him to study for the UPSC.
“For the same, or less, effort, I knew I would be able to find a well-paid job in the private sector," he told me.
Sharma got a master’s degree in finance next, and soon found a job at HDFC Bank. in Mumbai, where his starting salary was ₹24,000 a month. “My peers and I knew that stability wouldn’t be an issue. We only cared about promotions and growth, and it is a fact that the private sector would give us much greater career progression than any supposedly stable job in the government," he said,
Two years later in 2009, he bought his first car, a Maruti Alto, with the help of a loan, and after working in Bengaluru for a few years, he moved back to Madhya Pradesh, where he started a successful wealth management business in Bhopal. His clients largely include retired government servants looking to invest their pensions.
“Joining the public sector and getting promoted would have been harder for me as a general category applicant," he added.
With the implementation of the Mandal Commission report in 1990 and the subsequent economic liberalization in 1991, many forward caste members who had advanced degrees essentially vacated government service and dominated the nascent private sector. For this subset of educated young Indians, liberalization kicked off a 10-year boom in 2000 with the creation of thousands of high-paying jobs and opportunities that were unthinkable a few years earlier.
Noida, Gurugram, Bandra Kurla Complex, Whitefield and HITEC City rapidly eclipsed Connaught Place and Colaba as the hotbeds of economic power, fuelled by talented Indians joining companies lured to these areas in search of selling products and services to India’s growing middle class.
However, liberalization’s bounty has been concentrated in a few enclaves in India’s biggest cities, where pricey shopping malls and fancy office complexes stand on land considered remote just a few decades ago. As the reforms were primarily focused on the formal sector, the informal and non-corporate sectors—where a majority of India’s population finds its employment—continued to remain shackled. As a corollary, most individuals linked to the formal sector were able to capitalise on the economic churn, while those in the informal sector were expected to benefit from trickle-down economics.
A study by the International Labour Organization found that while the average wage of the Indian worker doubled from 1990 to 2010, the median wage failed to keep pace, implying that a small minority of workers were skewing the mean wage upwards. Further, a majority of the new jobs added from 2000 were in the low-productivity informal sector, where most workers make less than ₹11,000 a month, roughly half of their counterparts in the formal sector. This is why we see news reports of millions applying for peon-level positions in the government. A stable, decent-paying job is better than unstable and poorly compensated work
In an ideal situation, liberalization would have ushered in a migration from the farm to the factory. The lack of broad manufacturing policies created a situation where the factory was skipped and inequality exacerbated: where most workers are still toiling on farms or odd jobs for low pay, while a small group of white-collar workers makes unprecedented sums of money in the services sector
This essay is not meant to demonize wealth creation; its intent is to shine a light on wealth expansion. Jalaj Sharma and the snack stall owner are both small-town millennials, educated and running their own businesses yet each has had a vastly different experience from liberalization. Being a millennial and growing up with open markets hasn’t meant the same access to opportunity. But it has meant the same aspirations—of doing better than their parents, owning a house and a car, and being able to provide a comfortable life for their children.
Today, millennials across classes and geographies are more equal than ever in their access to information. The introduction of new television channels in the 1990s and the data and smartphone revolution currently underway has created India’s most aspirational generation. Millennials are inundated with ads about new cement to build houses, home loans to finance their construction, and paint to finish them, but many are not able to afford their own homes.
Given that they grew up before the economy liberalized, older millennials are happy to have left the lack of choice and opportunity in socialist India behind, but many feel the old rules still apply. Crucial networks of class and caste continue to play an important role in accessing opportunity. Government jobs are as competitive and desirable as earlier, while success in the private sector is still determined by one’s privilege. While aspirations have evolved, reality hasn’t kept pace
Opinion is subjective but data objective. Although liberalization accelerated India’s GDP growth, it failed to turbocharge job creation and change the structure of the job market. Finding answers to expand the benefits of liberalization and create millions like Sharma is the need of the hour.
Vivan Marwaha is a policy consultant and author of the forthcoming book, What Millennials Want, an intimate biography of Indian millennials (Penguin, June 2020). He tweets at @VivanMarwaha
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