Hoping for an economic miracle: Narendra Modi's employment gamble

Ever since he took office as prime minister in 2014, and in the run-up to the election that year, Prime Minister Narendra Modi made creation of jobs a major plank of his campaign and programme. But it turned out to be the most elusive goal.

There was economic growth though not as much as one expected and there was foreign investment, but there were no jobs that he had wanted to deliver so much. He had promised two crore jobs every year, about 10 lakh every month. But it did not happen.

When the opposition parties demanded the government figures for the jobs that have been created, the government hummed and hawed. The argument was that the employment statistics were not accurate. Then in September 2017, the government created data, showing the number of employees subscribing to the Employees Provident Fund (EPF), arguing that though confined to the limited organised sector, it would provide a better base for reliable employment data.

The new EPF subscribers between September 2017-March 2018 were 84,57,404, for April 2018-March 2019 it was 1,39,44,349, and the total figure from September 2017 to January 2020 was 3,20,98,535. The figures amply reflect that the record for job creation is depressingly modest. And this is but a very small slice of the people employed in the country because about 85% of the workforce in the country is in the informal sector.

The migrant labour crisis that exploded in the wake of the national lockdown imposed to contain the spread of Covid-19 where thousands of people, especially from the villages of Uttar Pradesh, Bihar, who had become jobless and homeless overnight, and thousands of them began to walks thousands of miles home even as the government waited till the end of April to arrange the Sharmik Express trains to take them home, set off the idea in the mind of Bharatiya Janata Party’s Uttar Pradesh Chief Minister Yogi Adityanath that the labour returning from the metro centres like Mumbai, Surat, Bengaluru, Gurugram could be used as a captive pool of workers to attract investments in the state.

It was also an attractive idea because it had the added advantage to persuade the poor people that they do not have to go off to far-off places in search of work and live in squalid conditions, and that job opportunities would be created nearer home.

It remains an idea and many people who had returned are making their way back to the big cities as the lockdown eases in many parts of the country and economic activity limps back to normalcy. The chief minister had also mooted at one point that the other states must take the permission of the Uttar Pradesh government before they hire people from the state, which smacked of a dictatorial approach as to how to deploy the workforce.

And the chief minister had also carried out the exercise of collecting data about the work skills of the labour who returned so as to create labour data base which could be used to create jobs in the state for the people of the state. It was called mapping of skills. The idea of finding jobs for workers from the most populous state in the country has turned out to be an unsurprising dud.

Modi took forward the idea of Adityanath when he announced in Bihar on June 20 a Rs 50,000 crore job-creation scheme to be rolled out in 116 districts across six states – Bihar, Uttar Pradesh, Rajasthan, Madhya Pradesh, Jharkhand and Odisha -- in 125 days, but mostly confined to building rural infrastructure like Panchayat Bhavans, Aanganwadi Bhavans, provide drinking water through Jal Jeevan Mission, roads, community toilets, cattle sheds, mandis, housing. The prime minister did not imply that this programme is an experiment in providing jobs for people near their homes.

He has indicated that the migrant labourers who returned from the cities could use their skills while they are in the village to build rural infrastructure. It has not been indicated whether the wages for working on these schemes would be paid MGNREGS rates.

Home remedies

It seems that Modi and Yogi Adityanath are working out home remedies for the problem of providing employment. While the prime minister’s Garib Kalyan Rozgar Yojana is confined to rural infrastructure, the UP CM is looking at the prospect of employment in the manufacturing sector in the state.

The assumption is premised on the fact that some of the multi-national corporations leaving China would set up shop in Uttar Pradesh. It may or may not happen, and it may not be possible for the CM to absorb the total workforce in the state in the manufacturing and service sectors in the state.

But it is a workable idea. It will be more difficult for the prime minister to absorb the whole of the migrant labour in infrastructural works in the rural areas because this could reach the saturation point quickly enough.

Modi is certainly toying with the idea that the rural sector is large enough to create a model for economic activity centred in villages. He is always on the lookout for alternative models, but it is not something that has been thought out fully.

If the manufacturing and service sectors in the sprawling cities cannot create enough jobs for the ever growing large pool of the workforce, the PM wants to find whether he can turn to the large hinterland itself to create a vast economic zone. Modi and the BJP started out in 2014 with the idea of shifting as many people as it is possible to the cities to shift the burden on land.

There was a move to amend the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act of 2013 in 2014. But the move hit the road block early on, and it was put on the backburner. It seems that Modi is turning to the villages for the economic miracle which he wants so badly for himself and for the country.