The great Indian jobs crisis

The Centre for Monitoring Indian Economy (CMIE), an independent private body, released distressing data last week saying that more than half of the 90 crore Indians, especially women, of legal working age – or roughly the equivalent of the combined total populations of Russia and the United States – have stopped looking for jobs in the absence of the right kind of employment opportunities. This should have sent alarm bells ringing in the government, which, according to many observers, is not paying enough attention to creating jobs. Instead, the government decided to deploy all its tools to defend itself and deny the report.

The Ministry of Labour and Employment called the report “factually incorrect”. It went on to claim that the labour force and the workforce in the country increased during 2017-18 and 2019-20. It rubbished the CMIE data by saying there has been an increase in the female labour force, as well as the female worker population, from the year 2017-18 to 2019-20. Union Labour Minister Bhupendra Yadav countered the CMIE findings by releasing the report of the Quarterly Employment Survey for the period October-December 2021, which showed a rising trend in employment in select organised sectors.

That India has been suffering from a serious unemployment problem is accepted by many organisations doing research on joblessness in the country. Millions have lost jobs after the onset of the Covid-19 pandemic. But even before that, the demonetisation of 2016 paralysed the informal sector, industrial output fell, and jobs disappeared. The hasty implementation of the Goods and Services Tax in 2017 proved to be another blow that slowed the economy and impacted jobs. The pandemic only aggravated the misery. Given that nearly 85% of India’s workforce is in the informal sector, the government has almost no reliable information on actual job losses as no data till date captures that sector. A household survey that is likely to begin later this year could throw some light on the actual unemployment scenario in the country.

Development economists have been suggesting that the government should do more on the job creation front in order to arrest brewing unrest among people.

“The government must do much more on job creation because lack of employment not only hurts the economy, it can also lead to social discord and other issues,” Reetika Khera, an associate professor of economics at the Indian Institute of Technology in Delhi, told DH.

She said on the one hand, the country has people desperate for decent work, and on the other, it has a serious shortage of teachers, nurses and other staff for basic public services.

The pupil teacher ratio or the ratio of nurses and doctors to population in India is low by international norms. Remember, unemployment rates are highest among the educated currently.

For instance, there are too many single-teacher schools where children from classes 1-5 are forced to sit together. Further, teachers spend hours maintaining attendance and other school records, because most government schools do not have any administrative staff to do this work. This lowers motivation of the teachers to teach students and provides them a convenient excuse not to do so. “The point I’m making is that there is a serious need for adding administrative capacity to improve the quality of public services such as health and education,” she said.

Besides this, for those who do not have adequate education for such jobs, proposals such as the Decentralised Urban Employment and Training (DUET), a sort of NREGA for urban areas should be considered seriously, according to Khera. Himachal Pradesh and Kerala already have such schemes in place. Others – including Jharkhand, Odisha, Rajasthan and Tamil Nadu – are not waiting for the central government and have announced budgets for this. Whether they actually implement it remains to be seen.

Turning to rural employment – the Mahatma Gandhi National Rural Employment Guarantee Act, 2005 (MGNREGA), a demand driven job guarantee scheme whose operation gives a fair sense of the rural job scenario, shows a grim picture again. An MGNREGA tracker developed by the workers’ rights group People’s Action for Employment Guarantee, showed that out of 17 crore registered job cards, only 9.7 crore were active in the six months from April 1 to September 30, 2021. A job card is said to be active if it has demanded work at least once in the past three years. The data also showed that some 1.5 crore households, which applied for job cards, were not even issued the cards. It showed only 6% households got more than 80 days of work under the MGNREGA, although the law guarantees 100 days of employment for each rural household at minimum wages.

The MGNREGA also provides that employment should be given within 15 days of demanding work, failing which the workers are entitled to an unemployment allowance. Besides, workers should be paid within 15 days of completion of work, failing which they are entitled to compensation for the delays. On both counts, gaps need to be filled.