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Growth sans employment

A sizable section of India’s educated youth remaining unemployed is the greatest challenge before the nation, which boasts of being one of the fastest growing economies in the world, observed former Indian prime minister and a world renowned economist, Manmohan Singh while speaking at a higher educational institution last March.
“Despite new industries coming up with new opportunities every day, a large segment of our youth is deprived of secure job opportunities according to their qualifications,” lamented Singh, who presided over a comparatively fruitful period of growth vis-à-vis employment. According to available data on employment an estimated 15 million jobs were created under Singh’s watch between 2005 and 2012. And yet, by the time he demitted office, a heavy backlog could not be averted as a whopping one million Indians are becoming age-eligible to join the workforce every month. No wonder why reports of highly qualified individuals applying for even menial jobs, like fetching tea and cleaning desks, are pouring in from all over the country regularly.
In January this year 19,000 applicants, a vast majority of them postgraduates in engineering and business management, vied for 114 posts of sweepers in the north Indian state of Uttar Pradesh where 2.3 million people with advanced qualifications applied for 368 government jobs, requiring no more than a fifth grade pass, last year. Similarly, in the mineral-rich province of Chhatisgarh, 75,000 well-trained job aspirants desperately wanted to qualify for the 30 posts of peon. Adding to the woe, figures released by the Indian government-run central statistical office Labor Bureau shows a sharp decline in the number of jobs created in the labor intensive sector in recent times. Employment generation in automobiles, metal, handloom, garment, textiles, leather, jewelry and Information Technology, which added 1.1 million jobs at their peak, has been dismal under present prime ministerial incumbent Narendra Modi’s little more than two years tenure, with a total of 135,000 jobs having been created in 2015 as against 421,000 and 419,000 in 2014 and 2013 respectively. Undoubtedly, there has been a steady slowdown in employment since 2009 when a much larger number of 1,250,000 jobs were created followed by 850,000 per annum in 2010 and 2011 successively.
In fact, Manmohan Singh’s policy incentives had helped create 10 million non-farm jobs in 2010-11 and 2011-12. However, the situation has only deteriorated as the first quarter of financial year 2015-16 recorded 43,000 job losses — the last quarter also maintaining similar trend — in addition to retrenchment of 70,000 contract workers. Even though expectations of the services sector hiring more than manufacturing this year is bit high, there is little to suggest that this will be sharp enough to gainfully employ millions of youths passing out of colleges and technical institutions. So, where have those jobs gone in a nation whose median age is well short of 30? Why is an economy apparently on the upswing, if we are to believe the high decibel propaganda of Modi apologists, unable to generate enough employment opportunities to cater to the demand of aspiring job seekers? Indeed, there is no denying that India is passing through a phase of jobless growth, despite all the boastful talk about strategically exploiting the demographic dividend that would take the country to a new height of prosperity.
A weak domestic industrial growth coupled with a struggling agriculture sector, resulting from widespread drought, as well as cost rationalization in several industries, thanks to the knock-on effect of a global slowdown has worsened the employment scenario further. In spite of the fact that India’s unemployment rate is expected to decrease marginally to 3.4 percent in 2016-17 from 3.5 percent in 2014-15, the number of people seeking jobs, as the International Labor Organization’s findings reveal, will rise to 17.6 million in 2017 from 17.5 million in 2015-16. However, many believe that with, more or less, one out of every three graduates is without a productive job in India today, the actual number of unemployed people may be far higher than officially projected. And a much bigger cause of concern, according to some experts, is the fact that the chance of getting employed in India gets diminished with rising level of education.
A report titled Transforming India, outlining Modi government’s economic vision, says 175 million new jobs could be created by 2032 if the economy grows by 10 percent per annum. And to create jobs on such a large scale, there is a proposal for tax incentives and interest subsidies for selected firms and some blue-sky interventions to invigorate various job-oriented sectors. But the point is, can runaway growth rate effectively treat the chronic employment crisis with more work now being done with fewer employees in this age of robotic and automation? Besides, only the highly urbanized centers are witnessing new job creation, resulting in sluggish employment prospects in semi-urban and rural areas and aggravation of regional inequalities consequently.
As per rating agency CARE, there has been a nominal 2.7 percent increase in India’s employment growth rate between 2011 and 2015 due to negative growth in manufacturing, while industrial production index has slowed down considerably with insufficient capacity utilization. As large manufacturers trim operations and traditional job creation engines as well as start-ups faltering, India must put emphasis on medium- and small-scale sector and leverage skill development programs to increase employability. Or else, Modi’s promised 10 million jobs a year will remain a distant dream.