Unemployment in India: Propaganda or Fact?

An extremely sensitive topic for the Indian economy and people with opinions from all angles, let’s look at unemployment and pay attention only to the facts. In the most prosperous industry that has proven to be the backbone of the country, agricultural employment fell from 44.52% in 2017 to 43.86% in 2018. This doesn’t sound that bad or much of a travesty. In contrast to this, it is: Employment in the agricultural sector as a percentage of total employment in 2012 was 47.04% and in 2007 was 53.92% (International Labour Organization).

There are constant, similar questions about the state of the job market:

  • Why are people not able to find jobs?
  • What are companies looking for that candidates are not able to fulfill and vice versa?
  • Are we in the middle of an ongoing economic crisis?

The Periodic Labour Force Survey (PLFS) of the National Sample Survey Office (NSSO) released the unemployment rate in the country for FY18 at 6.1% (5.3% in rural India and 7.8% in urban India). The New York Times reported this January that ‘India’s Leader is Accused of Hiding Unemployment Data’. This came after the Business Standard reported that these stats had been leaked to them after the government refused to release the report.

The ‘Consumer Confidence Survey’ conducted by the RBI for September 2019 reported that more than half (52.5%) respondents felt that the employment situation has worsened. India’s unemployment rate stood at 8.1% as of June 25, 2019, according to data released by Centre for Monitoring Indian Economy (CMIE). In a politically charged economy, many have questioned the credibility of these organizations and the legitimacy of their facts and figures.

What are the Causes?

The factors of the state of employment in the country have been diversified for a long time. WIth economists suggesting that “restrictive, complex and inflexible” labour laws are the culprit. While other scholars believe that the labour laws, together with poor regulation and lack of proper infrastructure have been the main drivers of the slowdown. Some experts conceptualize that the unemployment massacre should’ve been long estimated and that it’s a premeditated course to plunge the economic conditions further.

Lack of proper jobs has been an on-going problem since before the British left, with the first trade union was established in 1920 as the All India Trade Union Congress. Trade unions were established to provide job security and enforce labour laws that would protect the exploitation of employees of all organizations. Over the years, there has been some effort to improve the condition of the workforce and make it better for those who join the labour market.

Reasons like education, population growth, and lack of Investment have all been said to affect the employment rates, and lack thereof. Proper resources to prepare an employable workforce had not been put in place at the right time and the results are horrifying. The outdated methods of cultivating a healthy economy are proving to become a scary past that is hard to move on from. India’s troubles are caused partly by global forces beyond its control. But they are also the consequence of a deadly complacency that has led the country to miss a great opportunity.

The Economist had said that when reforms would have been relatively easy to introduce, the government failed to liberalize markets for labour, energy, and land. The infrastructure was not improved enough. The ghosts of failed economic revitalization strategies are haunting the current markets. Manufacturing based industries are showing points of weakness, and the startup culture might seem like a breath of fresh air, they have to deal with the problem of facilitating economies of scale.

The Efforts to Revive a Fading Star

Governments habitually treat unemployment as a serious problem during elections and during their time in office. Most of their efforts, however, have not had as much benefit as they would have anticipated. In the big-picture answer, India needs to kick-start economic growth, which fell to a 5-year low of 5.8% in the January-March quarter of FY 2019.

To create more stable jobs without the fear of layoffs, industry executives are requesting that the government needs to realize and incentivize sectors in manufacturing and services that have the potential for job creation. An unbalanced industrial sector could also result in job losses, a report by the Centre for Monitoring Indian Economy stated that almost 11 million Indians lost their jobs in 2018.

The initiatives, however glamorous they may be, have stayed ineffective to a large extent. Government has officially undertaken schemes like Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and Rajiv Gandhi Swavlamban Rozgar Yojna are examples of the initiatives that the government has undertaken to address the unemployment problem.

The government even attempted to promote vocational training to citizens with the Skill India campaign on 15 July 2015. The campaign aims to train over 40 crore people in India in different skills by 2022. The National Skill Development Corporation India (NSDC) was set up as a one of it’s kind Public Private Partnership Company that would catalyze, regulate and supervise the activities under the scheme.

The schemes, from a general overall perspective, are neither here nor there and have provided very little socio-economic upliftment.

How is the Problem Today?

According to the Pew Research Center, a large number of Indians consider the lack of employment opportunities as a “very big problem” in their country. “About 18.6 million Indians were jobless and another 393.7 million work in poor-quality jobs vulnerable to displacement,” states the Pew report.

The National Sample Survey Office’s (NSSO) Periodic Labour Force Survey (PLFS) for 2017-18 showed 11 states had an unemployment rate higher than the pan-Indian average. While Punjab, Tamil Nadu, Haryana, and Telangana are states where industrialization can’t be scoffed at.

In the upcoming Legislative Assembly polls, unemployment has once again risen to attention and is a major issue. Critics, however, still accuse the candidates of using the topic as propaganda. Finance Minister, Nirmala Seetharaman, while presenting the budget for FY 20, mentioned vague and unsure measures to contain or in any way improve the employment conditions. Prime Minister Narendra Modi, on the other hand, said that center sponsored schemes namely Ayushman Bharat Yojana will create almost 11 lakh jobs in the next 5 to 7 years.

There have been no direct references of how exactly job creation will take place and whether they will be fulfilled by government or corporates vacancies. For that matter, it’s not even clear if the corporate sector will be able to absorb the abundant workforce. The commercial sectors are taking on a hit of their own with the economy coming to a slowdown and almost no solution, support, or aid from the administration.

On the global platform, India is decoratively advertised as a prosperous nation of colors, lights, people, and diversity when in fact India and its people are facing extreme political and socio-economic instability. With the age of digitization, the adaptability and progressive capacities of the Indian economy, it’s people and the government who will be put to test. Whether the ruling party or opposition is able to spur the economy will eventually be the deciding factor for the superior leader.


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