Tackling jobless growth

Tackling jobless growth

Jobless growth is a persistent reality in India; it requires to be imaginatively and appropriately tackled. This jobless growth is despite medium term relatively high growth rates amid policies of ‘ease of doing business,’ economic reforms centring on privatisation and freedom for animal spirits to operate. The rates of investment as a proportion of GDP are slowing down. Organised sector employment is slowing down, given the policies to outsource employment and supplies across government and private industry.

The CMIE study indicates that unemployment in December 2018 stood at 7.4%, the highest in 27 months. Almost 90% of Indian employment is in the unorganised sector and is the cause of low security, substantiality and stability of incomes; this has added to the persistence of high levels of absolute and relative poverty. Automation and mechanisation in industries and agriculture are causing lowered absorption of labour; use of larger tonnage trucks absorbs fewer drivers in the transport industry.

Increased employment, real lowering of poverty and widening the area of stable decent wage/incomes are famously the goals of economic management and the traditional sinews of election manifestos. But these issues are not receiving serious attention. Instead there is propaganda and fudging of statistics. For example, increases in EPF and pension fund enrolments are straitjacketed as increase in employee numbers. But scholars have shown that this is a poor correlation; slight increase in employee numbers can lead to higher number of registration in EPF or pension fund in view of rules governing the numbers of employees at the enterprise level. Therefore such claims lack credibility.

Unorganised sector employment is cash centric. And the November 2016 demonetisation caused serious cessation of cash availability and employment got disrupted; losing faith many did not soon return to the work force. Adding to this is the introduction GST on small and big firms which could not cope with this taxation emergency and continue to function, employ, produce and pay.

India’s work force is not employable in industry, manufacturing and service sectors due to mismatch between available workers/skills on the one hand and the extant and emerging jobs. Without overcoming this mismatch there is no hope of placing large sections of youth in employment. Training facilities have not come up in any credible effective sense, despite the frequent reference to apprentice schemes and the ITIs and polytechnics. These training facilities have to reach villages in a big effective sense.

Increasing productivity

Pending these futuristic measures, we have to increase productivity in villages at the grass roots level; and MNREGS has empirically shown the way and it requires to be improved and calibrated; participatory democracy in MNREGS has to be sincerely implemented, allocations vastly increased. The scheme worked as bench mark wage levels in villages achieving more than 6% annual wage increased during 2007-’15; and later this level almost stagnated owing to systemic withdrawal of thrust.

Leveling of land and water body and rain water upgradation conservation will make land fertile and productive yielding more produce. Increase in income will facilitate increased schooling and up-skilling of village youth and thereon enabling higher and stable income employment. No doubt, organic agriculture, greening of hill slopes and village precincts will absorb more labour in the interim.

India has attained relative inexorability in development albeit low paced and in regional patches and social swathes. Population growth rate is coming down due to lowering of total fertility rates, less than 2.1 per woman, called the net replacement rate all across regions and social sections; particularly so in southern states and metropolitan regions.

Due to steady lowering of absolute poverty, though relative poverty is increasing along with inequality, more youth undergo skill training for longer years. But all round quality and specificity/versatility has to be improved; institutional intervention and encouragement have to be in place. But these issues are getting shrouded, getting a short shrift, in view of perpetual importance for elections and one-upmanship thereof on the part of rulers and general policy makers. When the top political leadership is not focused on employment generation, officials become relatively indifferent and youth of rural and urban India tend to be excluded from employment opportunities.

(The writer is former professor, Maharaja’s College, University of Mysore, Mysore)