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Lack of jobs create unprecedented crisis

By Lalit Sethi. Dated: 2/23/2019 1:50:39 AM

Is there an unprecedented crisis for work and jobs in India? The young and not so young are looking for jobs all the time, with little luck. They don't find them. Will the upcoming General Election generate hope? Or will leaders of political parties harp on the economic crisis and refuse to own up responsibility to do something tangible to ensure that all entities should clean up the big economic mess?
Will the political, bureaucratic, business class as well as banking and regulatory authorities be able to put India's house in order or continue to make great promises. Where does the buck stop?
What did Narendra Modi do to create the image of a demi-god around his persona? He said that rulers before him had misled the people. He would never do that. Has that excessive self-belief moment come to haunt him? By the present mood, Modi is not that sure. He can't even assure himself that he is a miracle man who has yet to succeed. Is that his moment of truth? He insists he is clean, but the judgment day is very near.
When did the scene of joblessness turn bleak? When was it ever bright? Five years ago it appeared that it was bright sunshine in the summer of 2014. A "magician" without a magic wand asked one question but before doing that he produced a tumbler with water in it in a garden setting. He asked his young audience of college students in Delhi University: do you say that the glass is half empty? They gasped in disbelief.
But the man with a shining beard took the contrarian position: "I say the glass is half full". The awe struck audience wondered if that was indeed true. Or was it jugglery with words? They soon forgot about the half empty glass. They did not think they were likely to be jobless. But a think tank has a different take. It says the job scenario turned bleak in the past year, as almost 11 million Indians lost their jobs during 2018. The Centre for Monitoring Indian Economy (CMIE) says in an analysis that individuals belonging to vulnerable groups have been "the worst hit by job losses in 2018. The number of unemployed has been steadily increasing in the country. The number of employed recorded in December 2018 was at 397 million, which is 10.9 million less than the figure of 407.9 million seen a year ago at the end of December 2017".
A close look at the unemployment trends shows that while people in the rural and urban India have been hit, most of the jobs' losses were reported from the countryside. "An estimated 9.1 million jobs were lost in rural India while the loss in urban India was 1.8 million. Rural India accounts for two-thirds of India's population, but it accounted for 84 per cent of the job losses".
Women were the worst hit by job losses during 2018: of the 11 million jobs lost, women accounted for 8.8 million. Men lost 2.2 million jobs. But did they gain 500,000 jobs, according to one CMIE estimate.
Job losses were concentrated among the uneducated, as well as daily wage earners, farm labour and small traders. These three categories were the worst affected in the aftermath of demonetisation. They included those employed on farms aged less than 40 or more than 60.
The services sector was less affected, with unemployment rising to 7.4 per cent until December 2018 in 15 months, but it is a preliminary estimate of the scenario for the months of September and December. But there is also a contradiction: India's unemployment rate has been rising steadily through 2018, with levels peaking in 27 months at 7.38 per cent as of December 2018 with working age people actually working or actively looking for work, though the educated Indian youths prefer a salaried job in the organised sector rather than be an entrepreneur. But Mr. Modi finds panacea in self-employment and a slew of schemes with popular acronyms. Coining expressions may be his forte; he loves to raise his index finger or roll into a small circle. It is a gimmick that has not taken him far in spite of the claim that by May-August 2018, the number of self-employed entrepreneurs had risen to 63.9 million. Yet this marginal growth was hit by the rapidly crashing formal job market.
The Modi government has faced strong criticism as it failed to live up to the election promise of adding 20 million jobs a year, but has fallen short by 13.5 million jobs every year, including 133 million new voters this year, though since 2014 , the total is 300 million, according to another estimate. Is it all a juggernaut, a play with statistics?
According to the election commission, the total number ofvoters stands at 850 million; the young employable population forms a significant part of this. Further analysis of the report showed that the number of unemployed people in India has been increasing steadily. The number of employed people recorded in December 2018 was 397 million, which is 10.9 million less than 407.9 million seen at the end of December 2017.
Between October 2016 and October 2017, 9 million jobs were lost, according to the latest CMIE data released last week. This trend is confirmed by successive Labour Bureau reports. Rejecting this formulation, Prime Minister Modi insists that he wants to "make India a Global Manufacturing Hub and make youths job creators". That promise was made at a meeting with international business persons on November 13, on the sidelines of the ASEAN summit in Manila. Yet the production of consumer durables dipped by 4.8% while infrastructure and construction goods output rose by just 0.5%.
The economy hasn't recovered from the shock of the demonetisation months, the CMIE data on employment shows. The average work participation rate during the ten months preceding demonetisation was 47 per cent. During the ten months following demonetisation, the average labour participation rate was down to 44 per cent.
Does that make Mr. Modi a dream merchant? The CMIE report concludes; "An estimated 120 million persons enter ndia's labour force (working age population) every year. So, a smaller army of unemployed is being created every day or week or month or every quarter.
Lalit Sethi is a Journalist of long standing and a commentator on Political and Social Issues.
—[IFS]