Quality and quantity of jobs a concern
It is the season of GDP growth revisions. Several agencies have duly revised India’s 2023-24 GDP projections upwards to 6.2-6.7 percent. India remains one of the bright spots at a time when large economies such as China, the UK and Europe are witnessing either a slowdown or are staring at a possible recession. In contrast, preliminary estimates indicate India’s second quarter GDP to increase by about 6.5 percent on the back of a decent first-quarter recovery. If the ongoing festive season sales should spur domestic private consumption, the sustained increase in government capital expenditure, along with the likely takeoff of the private investment cycle, should keep the growth momentum going during the rest of the fiscal.
Even as we expect a growth upside, job creation remains a key concern. According to private forecaster CMIE, the overall unemployment rate rose to 10.05 percent in October from 7.09 percent in September—the highest monthly rattle since May 2021. The data comes just weeks after the prime minister claimed that job creation had touched a new high and that the unemployment rate was at its lowest in six years. His remarks, coming ahead of a busy election season, were further confirmed by official data last month, which showed the unemployment rate declining to a six-year low of 3.2 percent between July 2022 and June 2023. This is a marked shift after the first Periodic Labour Force Survey (PLFS) revealed the unemployment rate to be at a four-decade high in 2017-18. With growth recovery, the benefits of development should reach both villages and cities equally, but as the CMIE data for October shows, rural unemployment was higher last month than in urban areas.
As the PLFS data itself confirms, the share of low-quality jobs has been increasing along with the rise in informal employment. A significant number of male non-agriculture workers continue to be engaged in informal jobs along with women. Manufacturing has the potential to create the much-needed high-quality jobs, but that prospect has been unrealised for decades. Even if we get lucky with an increase in production capacities, given the changing technology and increasing automation, the quantum of job creation may not be huge. For a large developing country like India, some amount of joblessness is unavoidable. Regardless of whether the issue becomes an election-decider, efforts should be made to improve the quality of jobs over quantity as India scales into being a middle-income economy.