Modi wants to generate 10.5 lakh jobs ahead of 2024 polls, but India needs 9.5 crore jobs now, say economists

Prime Minister Narendra Modi has instructed all departments and ministries to recruit 10.5 lakh people in the next 18 months ahead of the 2024 Lok Sabha elections; however India needs to generate close to 9.5 crore jobs now to abate the growing unemployment in the country, say economists.

This new directive from the Prime Minister comes eight years after promising 2 crore jobs yearly in 2014. The government should have generated close to 16 crore jobs by now.

Currently, India’s unemployment rate is close to 8%. However, as opposed to generating 10 crore jobs between 2016 and 2020, a report by the Centre for Economic Data and Analysis (CEDA) of Ashoka University in 2021 showed that India lost one crore jobs.

The latest CEDA survey from February 2022 showed that for India’s youth aged between 15 and 29, employed numbers in Oct-Dec 2021 (7.27 crore) were 13% lower than the same quarter in 2019 (pre-pandemic), and 30 % lower compared to the January-March 2016 quarter (10.38 crore).

As per the Centre for Monitoring Indian Economy (CMIE) data, unemployment hit 11.84% in May 2021.

Of the current job force of 42 crore, 8% are unemployed; this translated to 3.5 crore. This is the extent of unemployment. Of the 42 crore people, roughly about 2.5 crore are those who have given up looking for jobs. They are likely to be doing some odd jobs, but aren’t actively seeking jobs. Out of this a large percentage would be women because the labour force participation for women has dropped drastically.

Slamming the government for allegedly scamming people with the promise of just 10.5 lakh jobs in 18 months, Congress spokesperson Randeep Surjewala underscored that the national unemployment rate is almost at 8%, which is among the highest ever.

“However, the real unemployment rate has crossed 20%. If you look at various surveys, it all will add to this. About 21 million women disappeared from the workforce, leaving only 9% of the eligible population employed or looking for positions,” Surjewala said.

“The Prime Minister came to power promising ‘Achhe Din’ and on the promise of giving 2 crore job in a year. What happened to that promise? In reality, 14 crore jobs have been lost during demonetisation, poor implementation of GST and ill-advised lockdown. Instead of giving 16 crore jobs in eight years, 14 crore jobs have been lost. So, the net job loss is close to 30 crore in the country,” argued Surjewala.

Surjewala questioned why the government had announced only 10.5 lakh jobs when 30 lakh jobs are vacant in Union government offices and another 30 lakh with state governments.

Listing out the jobs, he said in the Union ministries alone, 9.1 lakh jobs were lying vacant, in public sector bank 2 lakh, in health services close to 3.5 lakh, higher educational institutions close to 35,000 and in the armed forces 3.5 lakh vacancies.

The government had informed Parliament early this year that there were 8.72 lakh vacant posts in central government departments as on March 1, 2020. About 2.3 lakh posts are vacant in the Railways Ministry, against nearly 15 lakh sanctioned posts. In the Ministry of Home Affairs, against 10.8 lakh sanctioned posts, nearly 1.3 lakh posts are vacant.

Highlighting the rising unemployment in the country, Professor Arun Kumar of the Institute of Social Sciences said data says that 8% are unemployed, but actually “we need jobs for more 20% of the eligible working population because of the underemployment and disguised unemployment”.

“This is the crux of the matter. We need jobs for close to 8.4 crore people and then every year almost 1 crore people enter the job market. So, they need jobs too. We need to generate around 9.5 crore proper jobs now and annually one crore jobs need to be generated. These 10.5 lakh jobs are not going to solve the problem,” asserted Kumar, who is the author of ‘Demonetisation and the Black Economy’.

CMIE MD Mahesh Vyas had said earlier this year that in December 2021 India needed to generate 85 lakh jobs, but could provide only 40 lakh jobs. The CMIE data had highlighted that the situation is much worse than what the government is telling us, because the government considers any person to be employed even if the person works for just half a day in a seven-day period.

India is characterised by underemployment and disguised unemployment. Explaining disguised unemployment, Kumar said if a person has nothing to do, they’ll probably go to their farm, sit there and just pass time or head elsewhere, but this isn’t counted under the unemployment figures.

Already, it had been reported that according to data compiled by the World Bank, between 2010 and 2020, the number of working women in India dropped from 26% to 19%. CMIE economists estimate that female employment plummeted to 9% by 2022.

What are the issues?

Unemployment can be tackled based on where the jobs are being created. “If you create jobs in the organised sector, then your investment will not create many jobs. The government has to create jobs in the unorganised sector to tackle the unemployment problem in India,” said Kumar.

In India, unfortunately, the problem is that people cannot afford to be unemployed because there is no social security and too much poverty. So, people will do some work, otherwise they will starve.

CMIE data shows the labour force participation rate in India is quite low compared to what it is in the other countries. Out of the working age population of 15 to 64, 40% of them are working. In 2015-16, 46% of the workforce was working. So, there is a 6% decline in the labour force participation rate.

If we were to compare the labour force participation with other big countries such as Brazil and China, we will see that they have about 60-65% participation rate. India’s is 20-25% less. This means that fewer people are contributing to the production in the economy. Most likely these are people who have quit looking for jobs probably because they cannot find jobs. This means the job creation is not very robust in India.

Listing out reasons, Kumar said 80% of all investment in India is in the organised sector, only 20% investment goes to the unorganised sector. Out of that, agriculture which is the largest employer gets only 5% of the investment.

“This is extremely inadequate. For 50% of the people who are working in the agriculture sector, there’s only 5% investment. There is 80% investment for 6% of the people who are working in the organised sector. The organised sector is also highly automated, so though work may have multiplied, the employment has been cut by half. Even the agriculture sector has been automated. To control unemployment, jobs have to be created in the non-farm sector,” added Kumar.

There are 6,000 units registered on the stock exchange; there are 6 lakh medium and small industries and 6 crore micro units. At least 97.5% of the medium and small industries employment is in the micro sector and only 2.5% of the employment is in the MSME sector.

In Uttar Pradesh, they announced 360 peon jobs in 2015 and for that 23 lakh people applied. Of these 380 were Ph.D holders, 2 lakh were B.Com, B.Tech and M.Tech holders. “Large number of jobs should be created for skilled people too. We have to improve our education system for this situation to improve. A lot of people in our country are not employable. These are the twin challenges facing this government,” observed Kumar.

People get into the unorganised sector out of desperation. The government is investing money in big projects, but these are not going to generate the employment required. Instead, they should be investing in social schemes.

“The government needs to invest money into small projects at district and village level, where people can be employed. Infrastructure projects may help growth. But, growth on its own will not solve the problem of unemployment. We need to see what kind of growth we need and the focus needs to be in the unorganised sector,” noted Kumar.