The jobless growth

The jobless growth

Worries for the economy

At last, the government has conceded the National Sample Survey Organisation (NSSO) findings. It is notable that NSSO had stated in its report of 66th round of employment and unemployment survey that between 2004-05 and 2009-10, the pace of employment generation had slowed down; the number and percentage of people under self employment have declined significantly.

It also concluded that during this period, casualisation of labour has also increased. When this report originally came 20 months back, the deputy chairman of Planning Commission, Montek Singh Ahluwalia had rejected the same and said that it was incorrect. However now, while answering a question asked by the standing committee of ministry of finance, the ministry of planning has conceded that employment generation has indeed come down.

Question is not merely of increase in unemployment in five years. In fact, since 1990-91, when new economic policy has taken off, rate of increase in unemployment has accelerated. It is notable that whereas in 1993-94, rate of unemployment in rural areas was 5.6 per cent and in urban areas it was 7.4 per cent. It looks strange that though during this period, the rate of employment generation has been at its bottom, and in five years hardly 2 million new employment opportunities could be created, rate of unemployment declined to 6.8 per cent and 5.8 per cent in rural and urban areas, respectively.
The government has been trying to pat its back for the sole consoling figure, that number of salaried employees have increased during this period from 1.52 crore to 1.64 crore. That is during this five years period number of salaried employees increased by 12 lakhs. However, here we must note that incomes of all salaried employees have not increased uniformly. Generally, employees getting regular salaries are not rewarded, as they used to be rewarded two decades back. Majority of new entrants get very small incomes and most of them are working on contract basis and their jobs lack permanency. Recently after strike in Maruti Suzuki, the management had conceded that a large number of their employees are working on contract, whose salaries are not even one third of their regular employees.
Self-employment in the county has been the worst victim between 2004-05 and 2009-10. Government has conceded that in 2004-05 there were 25.8 crore people in self-employment, and the same has declined to 23.3 crores in 2009-10. This implies that during this period 2.5 crore people went out of the self-employment. The self-employed people who have lost employment used to do farming, run their shops, small industries or some service enterprise. All know that self-employed people not only arrange employment for self, they give jobs to many more people. Therefore when 2.5 crore people go out of self-employment, it is no good omen for the nation.
Low wages
Not only that people have lost self-employment, but the number of casual labourers has also increased significantly during the same period. It is reported that whereas in 2004-05, there were 13 crore casual labour, in 2009-10, this number had already jumped to 15.13 crore. This clearly indicates at deteriorating quality of employment in the country. The casual labour gets very low wages and they do not get work for full year. According to official statistics, casual labour gets only Rs 100 to Rs 150 as wages and they get work for only 100 to 150 days. Even in governmental schemes, say for instance, MGNREGA, for rural labour, there is a provision to get work for only 100 days. Therefore by and large, the incomes of poor are going down, or at least not increasing at all.
The present UPA government has been boasting of its commitment towards inclusive growth. Inclusive growth means a growth when all groups especially the poor and deprived reap the benefit of growth in GDP. However, we cannot call jobless economic growth as inclusive growth. It may be noted that during 10th and 11th Five Year Plans, rate of growth of GDP was recorded at nearly 8 per cent.
However, even according to government's own admission, rate of growth of employment has been merely 0.06 per cent per annum (that is only 0.3 percent in five years). Government, while presenting its Economic Survey 2012-13, had said that the nation needs to reap the demographic dividend. Today India has world's largest youth population. India can became one of the leading countries of the world, while utilising its youth power to the full.
But this would remain merely a distant dream if rate of growth of employment remains low. Nations progress and became world power not by slogans, but by adopting suitable policies. If policy makers continue to neglect employment generation and ignore the phenomenon of jobless growth for two decades, growth can never become inclusive. At first, negating the reporting of joblessness in growth and then later after 20 months, accepting the same clearly indicates lack of sensitivity of those sitting in the government.
Unfortunately, the policy makers are trying to find answer to all economic ills in foreign investment. In the last 20 years, foreign investment has increased, but along with that, the stranglehold of foreigners on our resources have also become manifold. Foreign debt, which was hardly $ 83.8 billion in 1990-91, reached $ 374 billion in December 2012. This can be tolerated if the condition of poor, downtrodden, deprived and unemployed improves. But this is not happening.
We need to encourage small and cottage industries, adopt labour intensive techniques and end the neglect of agriculture. We also need to adopt a strategy for maximum possible employment by way of establishing food processing industry, value added services, etc. in the rural areas. Only then we may be able to reap the demographic dividend.

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