The first budget of the second Modi Government presented on Thursday completely ignored the acute job crisis in the country. Nowhere in the statement of the Finance Minister Nirmala Sitharaman, is there any mention of a problem called unemployment. The budget talks of achieving 7 per cent growth rate in 2019-20 and projects a US$ 5 trillion Indian economy by 2024 on the basis of the jobless growth strategy that the first Modi government pursued for the last five years.
The ten point vision elaborated in the FM’s address has everything including building a physical and social infrastructure, digital India, water management, space programme etc. but there is no mention of sufficient employment generation that will bring smiles to the faces of millions of youth who are languishing in hopelessness in the Modi era without getting any worthwhile job. The entire approach in the budget is that the investment push that has been given in the 2019-20 proposals, will lead to automatic generation of jobs and there is no need for any special programme for the youth.
But this has not yielded results in the first five years of the tenure of Narendra Modi. He promised to generate two crore jobs every year in 2014 election campaign. This promised talk continued for some time after he took over as Prime Minister in May 2014 but soon, he stopped talking of job generation and now in 2019, in his first budget of the second term, there is no reference to any target of new jobs generation. Some measures have been taken for the MSMEs but those are not adequate to meet the seriousness of the present unemployment crisis.
What is the position right now?
The National Sample Survey Office (NSSO) report has shown that the unemployment rate was at its highest level since 1972-73 now and in 2017-18, the joblessness rate among youth was at a significantly higher level compared to the previous years and much higher compared to that in the overall population.
For instance, the rate of joblessness among rural males in the age group of 15-29 years jumped more than three times to 17.4 per cent in 2017-18 compared to 5 per cent in 2011-12.Similarlty, the unemployment rate for female youth in rural areas stood at13.6 per cent in 2017-18 compared to 4.8 per cent in 2011-12.The unemployment rate for urban youth was more than their rural counterparts- 18.7 per cent for males and27.2 per cent for females.
This grim scenario has not been created in a day. It has been a continuous process and ever since the beginning of the Narendra Modi government, there has been more hype in talking about new schemes and acche din rather than concentrating on generation of jobs.
On the contrary, the sudden decision of demonetization announced in November 2016 destabilised the informal economy leading to the loss of lakhs of jobs rather than creating new jobs. That is why, the NDA government was most reluctant in coming out with the findings of the real ground situation in the employment market.
The findings of this NSSO report are of great significance as this is the first survey on employment conducted by a government agency after Prime Minister Narendra Modi announced demonetization. The informal sector employs huge number of people and this sector was affected most adversely after demonetization. There was no survey of job losses in this vital sector of the economy. This survey for the first time tried to do some assessment in totality. The survey shows that the labour force participation rate (LFPR) the proportion of population working or seeking jobs declined from 39.5 per cent in 2011-12 to 36.9 per cent in 2017-18. The LFPR has been declining since 2004-05 but the dip was at a higher pace in 2017-18 compared to 2011-12.
Senior economists point out there is no reliable data for assessing the state of joblessness in the informal sector. The magnitude of the hit received by the micro, small and medium enterprises following demonetization, has also not been assessed and the Government has no policy prescription since it does not recognize that there is really any big problem in the informal sector. The trading in informal sector is basically done through cash. Following demonetization, there was serious breach of channels through which businesses are done in rural areas.
The Economic Survey for 2018-19 presented to Parliament a day before the budget mentions that the working age population will grow by roughly 97 lakh per year during the coming decade and 42 lakh per year in the 2030’s. In next five years, nearly 5 crore young people will enter the job market. FM has no clue how they will be absorbed.