Government’s admission of failure to create jobs

The launch of the Rozgar Yojna scheme by Prime Minister Narendra Modi last week is an acknowledgement of the acute problem of unemployment in the country, which the government has been denying until now, and as close to an admission of failure to keep the promises of job creation made since the 2014 election campaign as the Prime Minister will ever come to. The latest CMIE data shows the unemployment rate moving towards 8%, after falling to 6.43%. Data for the previous quarter had also shown that people in the 20-29 age group make up about 85% of the unemployed. Those in the higher segment of the age group have an unemployment rate of over 12%. The country had for a long time experienced jobless growth even when the GDP was growing at a high rate. The problem became acute when the growth rate started to fall in recent years. Demonetisation and Covid worsened it.

The Rozgar Yojna drive aims to give jobs to one million people in the government sector and the first batch of 75,000 were given the letters of employment on Saturday. The posts for which appointments are being made include positions in the Central Armed Forces, Police, Income Tax etc. These recruitments are usually done by ministries and departments or through agencies like the UPSC, SSC and the Railway Recruitment Board. The vacancies are filled in the normal course without fanfare. In fact, many of these recruitments had probably been made already and were being packaged as part of the PM’s campaign. Recruitments are a continuous process in government, and melas have not been held in the past to give them publicity. The million jobs being offered will be spread over the next few months and so the electoral significance of the drive will not be missed.

It is not through such melas that the unemployment problem in the country should be addressed. Government jobs form only a small part of the total employment strength in the country. The Pay Commission had observed that the central government is at best a marginal source of employment generation. Most jobs need to be created in the private sector and that is not happening now. With about 12 million individuals entering the working age population each year, some six million jobs at least need to be created each year, and most of these have to be created outside government. The Prime Minister said that the country had become the fifth largest economy in the world. But it is the job-creation potential of growth that matters, not the size of the economy. So the actual impact of the Rozgar Yojna drive is not likely to be very big.