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The spectre of unemployment

Getty images/istockphoto

Getty images/istockphoto   | Photo Credit: Getty images/istockphoto


Sans quality jobs, ‘aspirational young India’ will become ‘angry young India’

The government – and Paytm – may not agree, but there are some downsides to the rising digitisation and connectivity. One is an unleashing of aspirations. Everyone wants not just what Bengal’s leftists used to contemptuously dismiss as components of the middle-class Indian dream — gaadi, baadi, chaakri (car, home, job) — but a whole lot of other things. From watching the latest Salman-starrer now — which is why India is the ‘download’ capital of the world — to the latest phone and footwear, people desire for all forms of comfort. This is a downside because the Indian economy is simply not in a position to create the kind of ecosystem which will enable all these aspirations to be realised by a vast majority of the people.

The other downside is the near-instantaneous transmission of unrest. Thanks to YouTube and WhatsApp, an expression of farmer unrest can travel from Mannargudi to Mandsaur faster than any ponderous government’s attempts to address or contain the disturbance within a particular area. So far, we have only had glimpses of what such spontaneous congregations can be like — tens of thousands of students virtually bringing Parliament to a standstill during the ‘Nirbhaya’ protests, or the huge crowds at Delhi’s Ramlila grounds which so spectacularly launched Arvind Kejriwal’s career as a mainstream political leader.

Recent farmer protests

If we haven’t had more such demonstrations, or bigger unrests, it is probably because there hasn’t been an issue big enough to concern all the people across the country at the same time. The recent farmer protests, big and significant though they were, left urban India untouched — except for Mumbai, where a 50% jump in vegetable, milk and meat prices in two days brought the Fadnavis government to its knees.

But there is one issue which, sooner or later, may unleash social unrest on a scale which will make the farmer agitation look like a toddler’s tantrum — jobs. Or more precisely, the lack of them.

That the available workforce of a country needs to be occupied in fruitful employment is a no-brainer. The reason global businesses are investing billions of dollars in India is its potential to become one of the world’s economic powerhouses.

Demographic advantage

This potential derives from India’s ‘demographic dividend’ — the millions of young people joining the workforce every year. India will add more than 100 million people of working age between now and 2025, by which time it will account for one-fifth of the entire world’s workforce.

That creating productive and remunerative jobs for these aspirants is India’s biggest economic challenge is also a no-brainer. As the Bombay Stock Exchange, which, in collaboration with the Centre for Monitoring Indian Economy, produces India’s only high-frequency indicator on employment, puts it eloquently: “The degree to which society can provide employment to those who seek employment is one of the most important indicators of the well-being of any society... A society where a large proportion of the labour force is employed provides respite from poverty and vulnerability. It also motivates households to spend more to improve their quality of life. In doing so, households propel economic growth and more employment.”

If that be the case, then, going by the BSE’s own yardstick, India appears to be in a very good place. As per the BSE-CMIE Unemployment Rate Index, the 30-day moving average of the unemployment rate was just 3.90 as of June 16 — 4.7% in urban areas and 3.5% in rural areas.

That’s an astonishingly good number. If 96% of India’s workforce is productively employed, as the index suggests, then Prime Minister Narendra Modi has more than made good on his pre-poll promise of creating one crore new jobs in five years. It also means that India is now well and truly a middle-income country, with poverty and deprivation confined to isolated pockets, and many, if not all, in a position to fulfil most of those newly unleashed aspirations.

Fall in agricultural employment

A recently released report by the McKinsey Global Institute also appears to suggest that India may be getting a handle on the challenge of creating qualitatively richer jobs in larger numbers. It says that between 2011 and 2015, agricultural employment fell by 26 million, while non-farm jobs increased by 33 million.

Unfortunately, as with all things statistical in India, the numbers hide more than they reveal. So, an open unemployment rate of under 4% doesn’t really mean that everyone else is usefully employed.

The vast majority of the poor simply do something or the other to survive, so they are termed ‘employed’. But they are by no means in a position to be attractive target consumers for any corporate.


The Fifth Annual Employment-Unemployment Survey Report revealed that in 2015-16, about 85% of India’s workers earned less than or up to ₹10,000 a month and only 0.5% of workers earned ₹50,000 or more. Using these figures, economist Sudipto Mundle argued in a recent paper that “the vast majority of India’s working households are still living precariously on the brink of survival”.

This is Modi’s — and India’s — biggest challenge. It is not just about creating jobs but generating employment that yields substantially more than mere sustenance. Otherwise, the ‘aspirational young India’ will turn into an ‘angry young India’.

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Printable version | Jan 29, 2020 10:38:11 PM | https://www.thehindu.com/education/careers/the-spectre-of-unemployment/article19095570.ece

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