India's Job Crisis Getting Worse

A reforms-oriented government, a plethora of social security ‘yojanas’, predicted economic growth of between 7.5 and 8 percent (at a time when global growth is hovering around the 3 percent mark), numerous black money and tax evasion measures, and above all, no new reports of corruption, or scams. Everything seems to be well with India, doesn’t it?

Look again. One of the key indicators of prosperity and socio-economic well-being in a country is its unemployment rate. It is here that the NDA government fails the youth of India. Lack of jobs is a time bomb waiting to explode and drown the nation’s morale.

If BJP comes to power, it will provide one crore jobs.”

For those of you who remember this electoral promise made by the Prime Minister in the run up to the Lok Sabha elections of 2014, here’s a reality check –

  • India’s population is 132 crores (2016);
  • Unemployment rate in the country went up to 5 percent in 2015-16 – a five-year high;
  • According to a data from the Labour Bureau, unemployment among women stands at 8.7 percent, and 4 percent for men;
  • According to the Fifth Annual Employment – Unemployment Survey (2015-16), about 77 percent of the households in the country do not have a person with a regular wage or salary.

Stagnation in Job Creation Will Affect Economy

According to a United Nations labour report, it looks likely that unemployment in the country is set to grow marginally. The report says that there were about 17.7 million unemployed people in 2016-17 and this number is likely to go up to 18 million in 2017-18.

Stagnation in job creation has far-reaching consequences. India dreams of achieving a phenomenal growth ratio, anywhere between 8 and 9 percent. If this is to become a possibility, employment and purchasing power have to rise. Growth in demand and unfolding markets are pre-requisites for reviving corporate investment and Foreign Direct Investment (FDI).

NITI Aayog’s Blotched Estimates

Unless large-scale employment opportunities are generated – at the earliest, at that – India’s economy shall spiral down a slope from which revival shall be difficult and future generations shall pay the price for such ignorance.

What is surprising is the silence of NITI Aayog (National Institution for Transforming India), India’s policy think-tank, about the issue. Last year, news reports revealed that the Chhattisgarh state government’s Directorate of Economics and Statistics had advertised to fill 30 peon vacancies. The job would fetch a salary of about Rs 14,000. The government received over 75,000 applications, including numerous applications from engineers and MBAs.

Every now and then reports of large-scale layoffs (remember Snapdeal, Ola, Cognizant?) keep coming in. Despite this apparent indicator, the NITI Aayog seems to suggest that the unemployment in the country is on the decline.

We are only left wondering why this need to ignore what is apparently a humongous concern; how can a problem of this magnitude be addressed unless we acknowledge its very existence. As mentioned earlier, Labour Bureau records suggest that unemployment levels in 2015-16 were estimated to be 5 percent, while the NITI Aayog says that it was 3.8 percent.

The government had kept our hopes buoyant about reaping rich benefits of the “demographic dividend”, but all that we are left with is confusion. India has more workers and fewer jobs.

From Skills Development To Employment

Before we sink into a state of gloom and disappointment about the state of unemployment, let us take a look at the schemes that have been implemented and scope for improvement in these, if any.

The NDA government started off on a very positive note. The Skill Development Mission launched by PM Modi in July 2015 was a brilliant idea. It aimed at improving skilled manpower in the country, the first step in transforming the country into a manufacturing hub (aka ‘Make In India‘).

It is estimated that only 2.3% of the workforce in India has undergone formal skill training as compared to 68% in the UK, 75% in Germany, 52% in USA, 80% in Japan and 96% in South Korea,” said the launch document of the mission.

The mission had set a goal of training 40 crore people in various skills by 2022. The Pradhan Mantri Kaushal Vikas Yojana (PMKVY), one of the main schemes of this mission is nowhere close to achieving its target, though. And what are we doing with the number of trained youth coming out of the PMKVY?

There is a lot that can be done to get the next generation ready to meet its own needs and find a sustained livelihood. The Public Sector Undertakings of India are one great source of employment and definitely need revitalisation, with young men and women who are capable of conceiving and executing fresh ideas.

Turning our PSUs into smart and self-sufficient profit-earning organisations means having to take a tough stand – letting go of age-old practices and cumbersome processes riddled with corruption and red tape.

Entrepreneurship is the Key

Entrepreneurship is the key to large-scale employment in the country. While this is something we agree upon largely, we stagger when we hit the most important of questions – “Where will the seed money come from?”

Why have we failed to look at the public sector banks and the quickly drying credit avenues that had fuelled our nation’s growth through the past seven decades?

Non-performing assets (NPA), now pegged at about Rs 6 lakh crore, is the reason this credit source is failing to invigorate new businesses. Taking serious measures to fix this and putting in place a robust credit check and reclamation mechanism in itself will bring much liquidity into the markets and boost new businesses.

Whatever it is that the government plans to do with the remaining two years that it has before the next Lok Sabha elections, employment and job creation must be at the core of it.

That is if the NDA desires another successful return to the lower house of parliament.