Unemployment Crisis: Staring at jobs loss and driverless cars

Every month, a million young Indians become ready to join the industrial workforce. Who can generate jobs for them?

A few weeks ago, a Delhi-based business daily scooped a story about how the centre, worried by the increased demand for rural jobs due to drought conditions, had told state governments to stop generating more jobs under the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). In its wisdom, it had used a popular messaging site, Whatsapp, for the communication, which was probably how the news leaked out. 

Although the ministry of rural development vehemently denied the report, it is well known that the government has little regard for this 10-year-old programme, which has created 19.84 billion man days of employment benefitting 276 million workers.

The disregard for MGNREGA is inconsistent with the dismal job scenario in the country, especially as a pathetic number of jobs has been added since the NDA government came to power in 2014, riding on its promise to provide jobs for millions of youth. The figures are not just discouraging, but utterly crushing. In 2015 only 1.5 lakh jobs were added, compared to 11 lakh jobs in 2011. 

These figures have to be seen in the context of the number of unemployed people that are added every month. India adds a million people every month to the industrial workforce and needs to create 115 million non-farm jobs over the next 10 years to ensure the country is able to reap demographic dividends. This is admittedly a humongous task and the impossibility of achieving even 10 percent of this target is staring at the government. 

Last year, Prime Minister Narendra Modi had announced that India would be in the top 50 on the World Bank list of countries where setting up businesses and running them is easy. Bizarrely, India has climbed just one step to 130 in a long list of 190 countries

Those that are part of the growing unemployed segment in the urban and rural sectors can sense that the government is running out of ideas. It’s much vaunted ‘Make in India’ programme has yielded zilch. In Febuary 2016, during a ‘Make in India’ summit, the total financial commitments that were made were to the tune of $225 billion, but how many jobs were they supposed to result in? According to a figure quoted by political scientist Christophe Jaffrelot, they were to provide just six million jobs. Going by the track record of these investment summits, there is no guarantee that India will attract this quantum of funds, but what is truly depressing is that most of it would either go into capital-intensive sectors or in companies that do not need labour at all such as Amazon. There is a clear mismatch between the growth rate of the Gross Domestic Product (GDP) and the growth rate of employment; GDP grows at 7.7 percent whereas employment grows at just 1.8 percent. In these times no government has the capability to bridge this mighty gap. 

In 2014, the NDA government was hoping to kick-start the ‘Make in India’ programme and attract investment in the economy, but this has not happened. All these initial promises made in terms of investments have not shown results. Countries like Japan, China and Saudi Arabia who promised colossal investments still have their hands in their pockets. In China there is a discussion in the media and chat groups about why their country should invest in India and help create jobs when the Indians are boycotting their goods and causing unemployment there. The more charitable are suggesting that China should continue to manufacture in their country and Indians, as they have been doing it in the past, should source their goods from there. Others want nothing to do with India. 

India was hoping that investment would spike as it improves its ‘ease of doing business’ score. Last year, Prime Minister Narendra Modi had announced that India would be in the top 50 on the World Bank list of countries where setting up businesses and running them is easy. Bizarrely, India has climbed just one step to 130 in a long list of 190 countries. It’s an embarrassing performance, but anyone who is in business would know what it takes to make profit in extremely difficult circumstances. The harassment from the department of income tax and the existence of a robust inspector raj make life difficult for entrepreneurs. 

It is due to this and more that Indian businesses are not investing in new projects. The real estate sector, despite suggestions of green shoots, has not really taken off. The same story is seen in the manufacturing sector. Our core sector seems to have fallen into an abyss. For the first time in many years, there has been negative growth in power generation and its offtake by distribution companies. It is not that there is no demand for electricity, but the distribution companies just do not have any money to buy it. This is also hurting coal production. Due to these reasons there are major lay-offs in the private sector and those who are employed find their condition worsening. What causes greater grief is that the employment in the public sector companies is steadily falling and if the government goes ahead with its strategic sale then the numbers will fall further. 

Although many people like to dub India’s growth story “jobless growth”, there are major misgivings about even the GDP numbers. Some believe that it does not go beyond 4 percent and what the country is experiencing is a serious recession, but the government is in denial. Does it really change the ground reality? 

On September 2, most of the trade unions in the country organised a nationwide day-long strike. The response to that strike was amazing. Even the organisers had not really realized how many people would spill out onto the streets and strike work. According to some estimates, it was the world’s biggest  strike in which more than 100 million people participated. The most remarkable aspect of this strike was that many of those who participated were not even unionised. They came to express solidarity after watching TV or getting a message through Whatsapp. Before the all-India strike, there have been a few flash leaderless strikes in places like Bengaluru where thousands have shown up after getting a Whatsapp message. 

Although many people like to dub India’s growth story “jobless growth”, there are major misgivings about even the GDP numbers. Some believe that it does not go beyond 4 percent and what the country is experiencing is a serious recession, but the government is in denial. Does it really change the ground reality? 

 

Similarly, there have been more organised struggles sweeping different parts of the country. The ‘mook Maratha’ or ‘silent Maratha’ protest may have been triggered by the rape of a Maratha woman by a Scheduled Caste man, but at its core is the demand for job reservations. Seeing the colossal rallies, the Maharashtra government was forced to accommodate the demand. Similarly, in Gujarat, the landholding class of Patidars has been agitating for reservations. They have seen how agriculture has become unviable and want the security of government jobs to keep their home fires burning. 

These are truly dismal times, but no political party is keen to ‘politicise’ it. And the crisis is aggravated by the growing spectre of automation and how it will replace more unskilled jobs. Driverless cars, whose trials have taken place in Singapore, clearly indicate the direction the economy will take in the future. Though many economists have misgivings about the concept of ‘basic income’, there is little alternative to providing some funds to the unemployed if the economy cannot create new jobs. To some extent, the basic income concept is being practised in different parts of the country, but it is a poor substitute for jobs.