The government may have hard sold the economy’s fastest growing tag to the voters, but when it comes to jobs the centre stands on a sticky wicket
In India, job creation has not kept pace with the 12 million people who are entering the labour market every year
NEW DELHI: Standing amid stacks of competitive exam books and notes in Delhi’s Mukherjee Nagar, 25-year-old Akash is searching for the ‘right material’ that may help him crack a job.
Wearing a white shirt, brown trousers and black flip-flops, Akash (who uses only one name) confesses his present status: “I am unemployed for the last three years".
Not a supporter of any political ideology, he believes, jobs and unemployment will be the key issue among youngsters in the 2019 general elections.
“A country which has a huge youth population will think of jobs. Last time, youngsters voted Modiji as he promised jobs, but that promise has not got translated into action. It’s election again and unemployment will play a part in deciding votes at least among educated youth. Frustration is building up among many," he said, pointing to groups of job aspirants in the vicinity.
For those may not be familiar, Mukherjee Nagar is one of India’s hotspots for career preparation. Close to Delhi University, the place represents an India where educated unemployment is a growing crisis. Home to hundreds of coaching institutions, book shops and inexpensive student housing facilities, the suburb offers the promise of a better life, though no one knows how many dreams are realised here. The place also offers an easy study of economic migration in Indian cities.
Avinash Kumar arrived in Mukherjee Nagar from Sheikhpura in Bihar, around four months ago to prepare better for a job. Nearly a year has passed since his graduation, but Kumar is yet to find a job. “It’s not about only government jobs. I am fine with a private job too, provided the salary is decent." If you are spending ₹10,000 per month in Delhi, doing a private job of ₹9000 salary is not acceptable, he said, arguing how both jobs and wages do play out in the minds of Indian youth.
Some experts and political analysts agree. Sanjay Kumar, director at Centre for the Study of Developing Societies said unemployment is a big issue in the minds of the voters this time.
“If you ask anyone, especially the youth, then it is a key agenda and pain point. A voter has many important issues but one vote. When he or she votes, it plays out in the mind, but what takes centre stage at that point is difficult to measure," argued Kumar, also a political analyst.
He said ahead of 2019 polls, jobs is a key issue but it has several traditional competitors too. “It can be jobs vs education, jobs vs national security, jobs vs caste equation or jobs vs religious priorities. But as you can see, job is a priority... and will play an important role during elections".
Arup Mitra, a professor at Institute of Economic Growth, who specialises on labour economy said first-time voters—88 million as per Election Commission data—will be a key constituency, for whom jobs will be important while voting.
“Jobs and wages are issues for common man. If a youngster gets a decent job, he or she won’t complain whether the job is formal or informal, fixed-term or permanent. The wage disparity is a key problem," argued Mitra.
“It is not always possible for a government to create jobs directly. However, if the economy can be made vibrant, people can create their own work opportunities in the informal sector. But the lack of dynamism implies reduction in the scale of business. Of late, due to shrinkage in purchasing power, the demand for goods and services seems to have undergone a decline. This has caused a decline in earning opportunities in the informal sector," added Mitra.
In India, job creation has not kept pace with the 12 million people who are entering the labour market every year. Data from Employees Provident Fund Organisation (EPFO) shows that between September 2017 and December 2018, while 9.63 million 18-25 year olds started subscribing to EPF (indicative of a formal job), 5.9 million left formal jobs during the same period. Of these, 1.3 million returned to formal jobs during the same period. Across age groups, EPFO recorded 18.9 million new EPF subscribers while about 15.46 million ceased EPF subscription. EPFO payroll data is available only from September 2017.
Meanwhile, the Centre for Monitoring Indian Economy, a private data research organisation, has estimated that during 2018, nearly 11 million people lost jobs—9.1 million in rural India and 1.8 million in urban India.
“Rural India accounts for two-thirds of India’s population, but it accounted for 84% of the job losses," CMIE said in a December report. Of the 11 million, women lost 8.8 million jobs and men lost 2.2 million, it said.
Several sets of data, however, have muddled the jobs debate, and the government’s hesitation to release key jobs reports has not helped either. The annual employment and unemployment survey of the labour bureau has not been published for the last two years, and the quarterly jobs survey of manufacturing and exports sector firms has been shelved. To worsen matters, the government also shelved the 2017-18 NSSO survey, while a leaked report suggested that the unemployment rate of 6.1% is a four-decade high.
“The debate is not about whether this government has created jobs or not, but about the seriousness of the government in finding a solution to the problem of jobless growth, which has plagued even the earlier government. The government, by denying access to the data, is not only doing a great disservice to the public, which has a right to know how the economy is doing on employment generation, but is also depriving policymakers of the right information needed to find a solution to the problem of jobless growth," said Himanshu, an associate professor at Jawaharlal Nehru University and a Mint columnist.
The counter-argument is: Can an economy, which has grown at an average of around 7.5% for the last five years, not create jobs?
Agreed Rituparna Chakaraborty, executive-vice president at human resource firm TeamLease Services.
“Our problem is employed poverty. For the longest time, we have pursued employment as a goal and landed up with low-paying jobs. We must acknowledge that India’s real problem is wages and not jobs," said Chakraborty.
“Our future employment and productivity outlook depends on our reform agenda to formalize micro, small and medium enterprises. Because the future of employment depends on our ability to create well-paying jobs...creating millions of well-paying jobs through small but formal entrepreneurs that will pay the wage premium because of enterprise productivity."
Chakraborty said the labour market prescriptions should be clear—build on progress made and get bolder with structural interventions that matter most to MSME entrepreneurs. Besides, civil service reform, labour law rationalization, e-governance and education reform will aid the final outcome.
But it may not be easy with gender pay gap, vast informality, lack of adequate wage premium for skilled workers and credible data. While the government claims it has been sincere about people and working class by reducing GST rate on essential items, offering income tax rebates, bringing pension scheme, and creating an enabling environment for better jobs and entrepreneurship, unions are not convinced.
“The working class is unhappy... 2.3 million government job vacancies are pending to be filled. Minimum wage is a misnomer in private sector. The government has abandoned the annual labour conference (a tripartite consultation) for four years now. Our plans are ready, we are mobilising our resources to make jobs the prime issue during general elections," said A.R. Sindhu, secretary at the Centre for Indian Trade Unions, affiliated to the Communist Party of India.
Come 23 May, it will be clear whether unemployment or other issues played a central role in determining the electoral outcome.