No magic wand to ward off growing job crisis in India

Experts warn that the new government at the Centre could have social unrest and political chaos to 
contend with if measures to contain continued job losses are not taken on an urgent basis

Published: 20th May 2019 03:34 AM  |   Last Updated: 20th May 2019 09:20 AM   |  A+A-

Jet Airways employees stage a protest over delay in their salaries at jantar mantar in New Delhi

Jet Airways employees stage a protest over delay in their salaries at jantar mantar in New Delhi (Photo | Shekhar Yadav)

Express News Service

NEW DELHI/PATIALA: Amashray Singh, 47, is a worried man. He used to work as a mechanic at a Delhi-based garments factory, Sardar Silk House, till November 2016. In December, a month after the Centre announced demonetisation, he was given three months’ salary and told to go home. 

“I belong to Hapur in Uttar Pradesh and needed this job desperately for there is nothing much back home. They said go home to your village and we will call you once things improve and start getting enough orders. But that has not happened,” said Singh.

Demonetisation saw many factories, small and large, shedding workers. A global and domestic demand slowdown kept capacity utilisation low, while the introduction of a well-intentioned but chaotically introduced Goods and Services Tax, imposed more compliance burdens on small companies. 

“All in all, it reduced jobs, especially in the informal sector,” said Biswajit Dhar of Jawaharlal Nehru University’s Centre for Economic Studies and Planning.

250Singh managed to find a part-time job in a copper wire cutting unit at half the salary he used to earn.

“But the work is back-breaking and this unit is an illegal one. Any day, it may be shut down by the municipal corporation. If that happens I do not know what to do, I have children to bring up, mortgages on my field taken for my sisters’ weddings to pay off, an aged father to look after and my monthly earnings have halved to Rs 15,000,” he said.

“I still stay in touch with my original owners. They are good people, but they too are helpless. Export orders which was the life-blood of the factory have dried up,” Singh said. 

Loss of jobs has been a negative in the current government’s report card. From small factories and export units to large airlines like Jet Airways and Kingfisher to software giants, the news is dismal. Even the educated are finding it hard to get jobs and there is resentment.

How painful has been the impact can be gauged from the life of Harvinder Singh, 24, of Sangrur in Punjab. He completed his BTech from Bhai Gurudas Group of Institutions in his home town two years back and is still jobless. Today, he works in a sugarcane field along with his father just two kilometers from his college.

“I applied for jobs both in the public and private sector but didn’t get any. My father spent `10 lakh on my education and here I am, working in a farm. Some of my friends went abroad, seeking greener pastures, and are working at petrol pumps,” Singh said.

Japleen Kaur, 25, who completed BBA and then a computer course, said she cannot even find the job of a receptionist. “There are no jobs. A telecom firm advertised for five persons at a salary of Rs 5000 per month. There were over 100 applicants and I could not qualify,” said Kaur, a mother of a two-year-old daughter in Patiala.

Cold statistics put out by the privately-run Centre for Monitoring India Economy as well as data leaked from the Government’s National Sample Survey Office indicate that job losses have risen to an all-time high.

While the CMIE data said that in 2018, the number of unemployed increased by 11 million people, with the unemployment rate surging to 7.4% in December 2018, the leaked NSSO data, which the Government has not acknowledged officially, said unemployment hit a record 6.1% in 2017-18, a 45-year peak.

Added to this is the continued chatter about layoffs in the information technology sector, a big employer of science and engineering graduates. Last year, about 56,000 software personnel were laid off by India’s largest IT firms as the increasing use of artificial intelligence (AI) and Internet of Things (IoT) made many jobs redundant. 

More job losses in this sector are expected this year unless the global economy picks up, adding to the government’s worry of highly-skilled unemployed persons thronging the labour market.

Prime Minister Narendra Modi has often spoken about India’s demographic dividend with an average age projected at 29 by 2020, one of the lowest in the world. But the inability to create jobs means that this dividend may well result in social instability as an estimated 1.2-1.5 crore young Indians 
join the ranks of job seekers every year.

The social impact of the sharp decline in job growth is scary.

“Slowing job growth can be disastrous for society. It will not only widen the economic gap within society, but it will also deepen social friction and cause tears in our social fabric, possibly leading to greater violence and political chaos,” said Neshat Quaiser, former head of the department of sociology at Jamia Millia Islamia.

The Government sector, too, hasn’t been adding many jobs. A reply by Minister of State in the PM’s Office, Jitendra Singh, to a Rajya Sabha question earlier this year showed that the number of candidates recommended by the Union Public Service Commission, Staff Selection Commission and Railway Recruitment Boards have been coming down in the last three years from 1,11,807 in 2015-16 to 1,00,933 in 2016-17 to 76,147 in 2017-18.

Economists say there is no silver bullet to solve the jobs conundrum.

“On employment creation, studies have shown a steady decline in labour intensity in Indian manufacturing. In 2000-01, over two-thirds of our exports were labour intensive and now almost 50% of the exports are capital intensive,” said M Govinda Rao, a former member of Prime Minister’s Economic Advisory Council.

“The new government will have to focus on an economic agenda without much loss of time, whichever party or a coalition of parties comes to power. The two most pressing issues are growth acceleration, and creation of productive employment,” Rao said.

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  • Nagar

    The US has promised one with the displacement of some 150 to 200 American companies from China!
    1 month ago reply
  • Eran

    Unemployment rate would soon cross 10% as the market is flooded with millions of poorest quality freshman
    1 month ago reply
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