at the heart of job creation

With his announcement of providing 10 lakh government jobs on “mission mode” over the next 18 months, Prime Minister Narendra Modi sent out four messages. One, job creation is indeed a problem and it can no longer be hidden from public discourse. Second, the private sector, especially modern sectors such as services and manufacturing, dominated by multinationals, have not created many jobs. Regardless of whether the information technology sector or the modern gig economy has created jobs, these are either very high-skilled jobs or low-skilled. Third, in the Nehruvian development plan, the government had an important place in the labor market. The National Democratic Alliance (NDA) government, which has a divergent ideology and often attacks the Nehruvian model, is now, ironically, in danger of politically affecting it due to ever-increasing inflation, unemployment and underemployment. And fourth, the NDA government has sounded the bugle for the 2024 general election.

employment trends

There is a need to critically study the populist announcements made by any government. Let’s look at some employment statistics. First, the last year for which we have received information about employment in the organized sector from the Directorate General of Employment and Training is 2012. The figures were made available under the Employment Market Information Program. The NDA government currently relies on Employees’ Provident Fund Organisation/National Pension System/Employees State Insurance Scheme registration and exit as an indicator of the formal labor market. This can be confusing as companies are increasing registrations to cross the border to become eligible to be covered under any of these. Therefore, it may be a matter of formality rather than job creation. Second, media reports suggest that more than 85% of those 10 lakh job aspirants can be consumed by the existing vacancies (8,72,243) in central government departments. In this sense, this announcement probably does not indicate a million new jobs. Third, 241 Central Public Sector Enterprises (CPSEs) are leaving jobs in recent years – from 10.84 lakh in 2017-18 to 10.71 lakh in 2018-19 and 9.22 lakh in 2019-20. Mr. Modi did not talk about job creation by CPSEs, although the decline is a matter of concern.

The creation of 10 lakh jobs also needs to be seen in the context of labor market. Even though there has been a marginal increase in the labor force and workforce participation rate, there has been a decline in the quality of jobs, ie. There has been an increase in the unpaid segment of the self-employed and the share of the agriculture sector in total employment as compared to the last three periodic labor force surveys (43% to 47%). This is a historical retrograde. This huge group of workers contributes about one-sixth of our national income due to low productivity, which does not bode well for a healthy economy. On the other hand, the share of manufacturing sector in national income has decreased in 2020-21 (10.9%) as compared to 2018-19 (12.1%).

Again, even though the overall general condition unemployment rate has declined slightly by a few percentage points (4.8% in 2019-20 to 4.6% in 2020-21), the current daily status unemployment figure (a figure used internationally) ) is 7.5%. All individuals in 2020-21. Educated unemployment rates in general (secondary school and above) and youth unemployment (15-29 years) in particular in urban areas have fallen very modestly from 2019-20 to 2020-21, but they are still a cause for concern. are enough to become (in the tens figure). The share of employment in informal enterprises has increased – from 2017-18 to 2020-21 for men (71% to 75%), women (55% to 57%) and all individuals (68% to 71%). Even though the share of regular salaried workers who did not have a formal employment contract, eligibility for paid leave and social security in any form has decreased for both sexes, the level is still high. The government can score a point or two by showing that many labor market variables have a declining trend. But an honest government will admit that even after three decades of economic reforms, the levels of many variables remain uncomfortably high.

role of private sector

Even if the Nehruvian model of development is attacked in the current dominant political discourse, we cannot avoid placing the government at the center of job creation beyond a certain point. The private sector creates jobs in response to market forces and taking into account fundamental changes in technological development. We cannot rely on job creation projections by the gig economy. They are estimates calculated by a trade body or by consulting agencies with a vested interest. Since they are political economy agents influencing government policies, many need to read their predictions with a pinch of salt. The job recovery stories, published from time to time in Pink Press based on employment service providers such as the Monster Employment Index, must be viewed in the context of an extremely job-poor economy like ours. Modern private sector projects consume a lot of capital to generate very few jobs. For example, recently, there was a report that the Adani Group has invested ₹70,000 crore (or ₹700 million) in Uttar Pradesh to create just 30,000 jobs. Foreign direct investment, which at any rate is highly capital-intensive, mostly goes to the non-manufacturing sectors.

quantity and quality of jobs

Employment is not just about numbers and growth figures. We need to focus on enabling decent work and the creation of a sustainable labor market, to which India is committed as a member of the United Nations and the International Labor Organization. Unknowingly or otherwise, the role of government in job creation has entered popular discussions and discussions on policy making. While even one job is a miracle, we need millions. The government should play an important role soon. A lean and mean government, often dictated by the neoliberal project, often results in a regime deficit. The government should re-establish its role as a major employment generator through jobs in its ministries and CPSEs and through assured employment generation programs like MGNREGA.

KR Shyam Sundar is the Visiting Professor, XLRI, Xavier School of Management, Jamshedpur.