The Nation Wants To ‘Get Employed’, Is job growth the biggest disappointment of Modi government?
Cashing on the promise of Ache Din (good days), Narendra Modi won a landslide victory in 2014. Three years hence, the country’s job growth rate has plummeted to an abysmally low level. Government's labour bureau statistics show that job growth dipped in key sectors to its lowest levels in eight years in calendar years 2015 and 2016 at 1.55 lakh and 2.31 lakh, respectively, compared with a high of over 10 lakh new jobs created in 2009 when Manmohan Singh was in office.
Source: Ministry of Labour and Employment
The latest labour bureau report which provide records of eight sectors for nine months in 2016 till end-December shows low job growth in almost all sectors and jobs shrinking in construction and hotels and restaurants. The sectors include manufacturing, construction, trade, transport, hotels and restaurant, information technology, education and health.
Dr. Abhinav Priyadarshi Tripathi, assistant professor at ITS Institute, Ghaziabad told BW Businessworld, “Job creation is possible only when the government works on every sector of the economy-primary, secondary and tertiary. Further, demonetisation greatly disrupted the cash flow in the market which led to wide-spread job loss. It will take some time for the informal sector (which is employment generator) to bounce back.”
Chief Economic Adviser Arvind Subramaniam recently pointed out the need to achieve higher economic growth, in the range of 8 to 10 per cent, to solve the problem of jobless growth.
However, higher economic growth alone will not solve the job creation issue. India was the fastest growing economy till the last financial quarter, however, that couldn’t shape into higher growth. The government needs to focus on shifting the labour from agriculture (where disguised unemployment exists) to service sector and manufacturing sector (which is facing a slowdown due to lack of private investment).
Dr. Tripathi explains the contradiction of jobless growth saying, “The parameters to measure GDP have been changed which inflate the figures but it doesn’t indicate growth on every front. The important aspect which we need to understand is that GDP is rising as the market value of products is soaring high, it doesn’t really reflect rise in demand. The government needs to understand the fact that increasing valuation is not enough, there must be scope for human interface in economy chains.”
He further adds, “We are in a stage of transition, with demonetisation and GST, we may witness some disruption. However, GST will surely give a thrust to the job growth in the country. The higher allocations in infrastructure sector may not have a direct impact on job growth but it will ensure positive outcomes some years down the line.”
A report by Pranjul Bhandari, chief economist, HSBC Securities and Capital Market (India) Private Limited suggests India needs to create 80 million jobs in the next decade. The report stresses on the need of skill development in the country for better employment figures. It further adds that in the coming years, e-commerce is expected to generate approximately 12 million new jobs in India which could be a great boost in this regard.
However, it cannot be denied that the government’s efforts towards firing up the country’s jobs market, seem to have come to a naught, at least so far.
