In Rajasthan last year, an astounding 16 lakh people appeared in a single day for a state-level eligibility test for government teaching jobs – forcing the government to take unprecedented security and logistical measures, including shutting down internet throughout the state (still there was a paper leak and it has now snowballed into a major crisis). A recent Dainik Bhaskar report accurately points out the source of the crisis – Rajasthan has the highest level of unemployment in the country among the graduates where every second graduate is jobless (even general unemployment is very high at 27%).
If you want to understand the state of the Indian economy through one set of numbers, then just look at the unemployment numbers. From burning trains to stagnant demand, from migration pattern (or the heart-breaking reverse migration back to North and East in 2020) to agrarian unrest – unemployment numbers hold the key to the core crisis of the Indian economy today.
Jobless Growth
Even before the lockdown, with the economy in the grip of a deep structural slow-down, unemployment was the biggest concern. A National Sample Survey Office (NSSO) report—hidden for long before being leaked—admitted that unemployment had risen to a 45-year high of 6.1%.
After a decade of steady job creation, unemployment started raising its ugly head since 2011–2012. Not only were there fewer jobs created now than before but there were also serious job losses to contend with. Government data points out that between 2011–2012 and 2017– 2018, there was a loss of at least 66 lakh jobs.
Growth vs Employment (source: McKinsey, India’s Turning Point)
The first lockdown, announced in March’20, resulted in
12 crore people losing their jobs/livelihoods. It was an unprecedented shock
for the Indian workforce. Gradually, most of them could get back to work but
not the same type of work. As a salaried person lost his job, he tried gig work
or small business. Similarly, from micro businesses/hawking, people shifted to
daily wage labour.
The latest CMIE figures show that the unemployment rate stands at 7.9% in December’21. Almost two years after the pandemic – and another major shock during the second wave in April-May’21 - the total number of employed (despite a net increase in working age population) at 406 million is still below the level of 2019 (409 million).
Salaried employees lost 9.5 million
jobs so far and another 1 million loss was reported among the entrepreneurs.
This huge loss was offset by an increase of the number of daily wage labourers
and farmers.
MGNREGA: The Ultimate Rescue Mission
The most important barometer for
tracking unemployment in India for the last couple of years has been the
Mahatma Gandhi National Rural Employment Guarantee Scheme or MGNREGA. In FY21,
one in four workers that is 11.2 crore Indians sought work under this UPA-era welfare
scheme. Not only was this the highest ever figure but it was also 45%
higher than 2019-20. Over this high base, in the first 8 months of the current
financial year, it has gone up by another 20%. In fact, the work demand in November’21
compared to November’20 is higher by as much as 90%. Due to this higher demand,
the government is able to provide work to only 61% of the job seekers and that
too on an average just 46 days a year against a promise of 100 days.
Larger Concern
An unemployment rate of 7.9% indicates that this category of population is
actively seeking work, but it does not mean that the rest of the population
(nearly 92%) is employed. In fact, what is more worrisome is the low employment
rate in India. The World Bank estimates it to be just 43% (against a global
average of 55% in 2020) and CMIE at 38%. Why so few people are seeking
employment in India despite so much poverty? The simplest answer is that there
is no employment to be sought nearby for most of them (employment rate for two
major neighbours - Bangladesh and Pakistan - stands at 53% and 48%,
respectively).
|
Women This pandemic-recession has been disastrous for women employment
in India. Despite accounting for hardly 20% of the workforce, by November
2020, 49% of all job losses were borne by women. They also suffered more
during the second wave and as a result, unemployment rate among women has
gone up sharply and more women are falling out of the labour force. The
latest CMIE data shows that women make up for 23% of all unemployed who are
actively looking for jobs, but 53% of those 17 million who want to work but
are not looking for jobs actively. We need to seriously look into this
problem why more and more women are unable to find work and what sort of
enabling policy support they need. Again, equally disturbing is the medium-term trend of a very low participation of women in the workforce. In 2015, only 23% of working age women were in the labour force. Despite economic growth and rise in educational attainments, this rate has been steadily coming down (35% in 1983). |
Uncertain Future
The most difficult struggle for millions of Indians
has been to find a job.
To provide jobs to six crore new entrants to the workforce and also to accommodate three crore more who could move from subsistence farming to more productive non-farm jobs (and not taking into account the need to correct the gender imbalance), India needs to create at least 9 crore jobs by 2030. This is a gigantic challenge. Nine crore jobs by 2030 means on an average 1.2 crore new jobs per year from the FY2023. To put that in perspective, between 2012 and 2018, India could create only 40 lakh non-farm jobs per annum.
As jobs are central to post-pandemic recovery and future growth, all policy measures at all levels – from tax relief to Swachh Bharat Mission - now need to be devised and evaluated principally on one parameter—that of job creation. In fact, it is now desirable to measure the overall employment impact of government budget and policies. In Countdown, we have provided a complete blue-print for employment-intensive sustainable growth.
