Failure to create jobs begins to haunt govt

With barely three months to go for the general election, Prime Minister Narendra Modi’s promise of creating one crore jobs has come to haunt him. India’s unemployment rate shot up to a 15-month high of 7.4 per cent in December 2018 and should be giving the government sleepless nights. This was further compounded by the fact that India lost 11 million jobs in 2018, with rural areas being the worst hit.

It is ironic that while India is the world’s fastest growing economy, it has largely been jobless growth, which was epitomised in 25 million people applying for 90,000 ordinary railway jobs!

The government should be even more worried as rural India bore the brunt of this jobless growth, and saw 84 per cent of the total jobs lost. In the recent Assembly elections in several states, the ruling BJP lost heavily in rural areas. These figures should be a wake-up call for the government as it hopes to be voted back to power in May.

To be fair to the government, this setback on the job front is not for want of trying. It initiated a number of “yojanas” like the Pradhan Mantri Kaushal Vikas Yojana (PMKVY), but the benefit of these programmes could not be utilised as of 30.67 lakh people who were skilled by PMKVY, only 2.9 lakh could find jobs.

It must be appreciated that the government was caught between the devil and the deep sea. It adopted the soft option of being popular instead of taking stringent steps like land and labour reforms. These are two important requirements for attracting international funds. It applies to domestic investments too as many in the private sector preferred to employ people on a temporary basis to skirt the labour laws. These reforms are as important, if not more, than the ease of doing business measures taken by the government to attract investment.

Another failure of the Modi government was its inability to materialise “Sabka saath sabka vikas”. It failed to support job generating sectors like textiles and leather goods, and footwear and local garment manufacturers. They languished for lack of funds, giving fodder to the Opposition’s derisive “suit-boot” jibe.

Prime Minister Modi’s reckless demonetisation drive not only led to a 1.5 per cent drop in GDP, to the extent of Rs 2.25 lakh crores a year, but resulted in 15 crore daily wage earners without any work in the short term. The government could perhaps redeem some of its promises by focusing on offering incentives for creating jobs for women in the textiles and apparel sectors. This is easier said than done as the government has little leeway in spending. But sops like these could gain it some political advantage as women do form a significant chunk of the national electorate.