FOCUS NATION Devinder Sharma
Despite racing ahead in economic growth, surpassing China’s slowing economy, India is unable to keep pace when it comes to creating jobs
==
BLURB
India needs to create about 1.2crore jobs every year to cater to the needs of the aspiring workforce waiting to enter the job market every year. Most of these jobs also fall in the lowest category of guards and lift operators. If these are the kind of jobs that are being created, it is high time the country reconsiders what it means by ‘employment creation’
TEXT
Economist Arvind Panagariya has in his opening piece on the newly launched website of the NITI Ayog said: “Unless workers have the opportunity to migrate to better-paid jobs in industry and services sector, they will be unable to fully share in the prosperity experienced by a fast growing economy.” This is exactly what the World Bank has been telling India to do for over two decades now.
But what remains unexplained is that despite racing ahead in economic growth, surpassing China’s slowing economy, India is unable to keep pace when it comes to creating jobs. A survey by Labour Bureau shows that job growth has declined in the third quarter of 2014-15.
During the quarter October-December 2014, only 1.17lakh jobs were created in eight key sectors of the economy. A careful perusal shows that job growth has been steadily on the decline in the first three quarters of the year. From 1.82lakh jobs created in April-June, it came down to 1.58lakh jobs in July-September; and further slid to 1.17lakh jobs in October-December 2014.
Total jobs created in the first three quarters of 2014-15 therefore add to 4.57lakh. At this rate, even if we take the highest figure of job creation in 2014 for the first quarter of 2014, as the likely jobs to be created in the fourth quarter January-March 2015, the total jobs created would be somewhere around 5.40lakh. India needs to create about 1.2crore jobs every year to cater to the needs of the aspiring workforce waiting to enter the job market every year. Most of these jobs also fall in the lowest category of guards and lift operators. If these are the kind of jobs that are being created, it is high time the country reconsiders what it means by saying employment creation.
The dismally low job growth is being witnessed at a time when economic growth has been revised upwards for 2014-15 fiscal. The government has pegged economic growth for 2014-15 fiscal at 7.4 per cent. The declining rate of job creation at a time when economic growth has been on an upswing defies the academic assumption that the higher the growth, the more the employment generation. Recall the period when Dr Manmohan Singh became the Prime Minister in 2004. Between 2004 and 2009, India’s GDP grew at a stupendous rate of over 8 per cent, and clocked 9.3 per cent at its best. Going by the general economic prescription, the high growth rate should have created a large number of jobs.
It didn’t happen. On the contrary, India witnessed an increase in joblessness when its GDP was galloping ahead. A Planning Commission study shows that 14crore people left agriculture in the period 2005-09. Those quitting agriculture are generally believed to be entering the manufacturing sector. But even in the manufacturing sector, 5.3crore jobs were lost.
The question that crops up is where the 14crore who quit agriculture, and the 5.3crore who were shunted out of the manufacturing sector, finally go to. The only plausible answer is they joined the ever-growing army of daily wage workers in the cities or became landless farm workers.
In the ten-year period, between 2004-05 and 2014-15, industry has been given tax concessions to the tune of Rs 42lakh crore. One of the objectives behind this massive subsidy for the industrial sector is that it will help expand manufacturing, industrial production, and exports, thereby creating more jobs. But, in the past 10 years, only 1.5crore jobs have been created against the need for creating employment opportunities for at least 12crore people. It only shows the expectation that industry alone will provide jobs has not proven to be true. More so, at a time when the world is witnessing automatic and jobless growth, it is futile to expect the new industry also to create jobs.
More recently, CRISIL, a global analytical company, has shown in a study that, since 2007, over 3.7crore Indian farmers had abandoned agriculture and migrated to cities. But, in the last two years – between 2012 and 2014 – when economic growth had remained sluggish, an estimated 1.5crore have returned to the villages in the absence of job opportunities. This establishes the argument that more and more people are joining the daily wage working class, whether on the farms or in the cities.
By providing more and more workforce with jobs that are akin to daily wagers (dehari mazdoor), a situation is created wherein the fruits of economic growth are simply not benefitting the common man. It is time to rethink and revisit the economic growth model to see where an economically-secure employment environment can be created. When we look around, we are baffled to find that millions of jobs in the formal sector are lying vacant. In fact, such vacancies are growing every month. Government as well as public sector institutions are being starved to death in the process. Vacancies in place of those who are retiring are not being filled.
Almost all universities and government colleges have anything between 40 to 60 per cent of the jobs lying vacant. In schools, both primary and secondary, a minimum of 5lakh posts are lying vacant. Add to this the hands required in hospitals, police, postal services, and other government institutions. Several million employment vacancies exist in this country, but are not filled. Filling these vacancies will raise GDP besides making these dying institutions more functional. One fails to understand why are government bodies/institutes as well as public sector undertakings deliberately and systematically being killed. This cannot continue like this. Job-creation is something that cannot be left to the private sector alone.
In addition, moving people out of agriculture into the cities to be employed as cheap daily wage worker is not what employment generations stand for. The challenge should be on making people in agriculture gainfully employed rather than uprooting them from agriculture to serve the needs of the infrastructure industry which needs cheap manual workforce. This can be easily done by making the right kind of public sector investments in farming. At present, MNREGA budget is more than the budget of agriculture, which means that all-out efforts are to make farming economically unviable and create conditions whereby farmers are forced to quit agriculture and become dehari mazdoor in cities.
The writer is a prominent global food and trade policy analyst.
