Thomas Franco and Dinesh Abrol

Random Reflections

As it is impossible to refute the report of the International Labour Organisation, the Chief Economic Advisor Anantha Nageswaran recently said that the Government cannot solve all social, economic problems like unemployment and social security. He blamed the youth for not acquiring enough skills to get employment. Then can’t the people ask, ‘Why do we have a government? Is it not the government’s responsibility to provide adequate employment to its citizens?’

Modi promised that he would provide 2 crore employment every year. Why did he fail? What came in his way? Greater employment generation required a paradigm shift. Rather than shifting to a model targeting the sustainability of livelihoods of people as a whole the policy choices of the Modi Government moved only towards fuelling the growth process seeking an increase in GDP. The GDP growth-based development process targets the support for the corporates. Investment directions have been moving away from the focus on the protection and sustenance of peasants, artisans, technicians, workers and professionals. Not surprising, that the fuelling of growth is ending up as a predatory process.

The control of petty producers over the markets, resources and capabilities is on the decline. The market power has been passed on legally, fully supported by the government, to the foreign and domestic capital. The corporates have more freedom to use inappropriately selected modern technologies to reduce their dependence on labour. The ideology of relying on the corporates is keeping the professionals, skilled and unskilled labour at the mercy of capitalists. Policymakers cannot expect the realization of employment generation goals to materialise through the process of trickle-down. In the process, the nation has ended up realizing a complete misalignment in the directions of public and private investment vis-à-vis the goals of self-reliant sustainable development. The growth process is resulting in import dependence as well as job loss.

The Modi Government has been promoting extreme forms of privatization, creating infrastructure monopolies, harming the unorganized sector through demonetization, misdirected lockdown and GST, weakening trade unions, and excluding state and local governments from decision-making and policy-making in the use of water, land, minerals and biodiversity. The theory that the children should take care of the parents and not the Government (stated by Mr. S. Gurumurthy, Director RBI and RSS ideologue) has led to the weakening of reservations and pensions and supporting the corporate sector creating conditions for a situation of serious unemployment for young graduates. The Government does not have any credible data to show that they have even made efforts to create 2 crore jobs in 10 years.

Instead of permanent employment in the Army, Agni Veers are provided 4 years of employment and the majority of them will be at the mercy of the capitalists to get low-paid jobs, mostly as watchmen at a young age. There is every possibility that the super-rich will create their own Private Army like we have seen in Russia. It’s unfortunate that our youth are seeking jobs in Israel and Russia risking their life because of unemployment. Contract employment, instead of permanent employment, up to the level of Joint Secretary Positions, leaves a large section of the employees without provident fund, gratuity and pension. So is the case with the outsourcing of permanent jobs to contractors.

The killer in this philosophy is killing the reservation policy. Modiji himself has stated that reservation policy leads to inferior quality of staff. BJP State president, Tamil Nadu who got into Government service under reservation now says he is not from the quota policy. Such is their hatred towards reservation which has led to a massive reduction in permanent jobs in Government, public sector and public services like the Railways, Banking, Transport and Communication and Electricity(the largest employers).

The ILO Report

The ILO Report 2024 has done a great service by analysing the employment situation in our country with authentic data from National Sample Surveys, periodic labour force surveys, RBI-  KLEMS data base, Annual survey of industries and National Accounts statistics.

Some of the key findings in the report are:

  • There have been General improvements in employment conditions over the years but the trend was halted after 2019, so employment conditions remain poor.
  • The slow transition to non- farm employment has halted. That means people are forced to go back to low paid agriculture based employment.
  • Women largely account for the increase in self-employment and unpaid family work. Their share of regular work has declined after 2018.
  • Employment is dominated by poor quality employment in the informal sector and informal employment. 82% of the workforce is engaged in the informal sector and nearly 90% are informally employed. That means no permanent social security.
  • Wages and earnings are stagnant or declining.
  • 62% of the unskilled agriculture workers and 70% of construction workers did not get the minimum wage which itself is too low.
  • Production process has increasingly become capital-intensive and labour-saving.
  • Digitalisation and the introduction of new technologies are changing the structure of industrial employment.
  • Disparities are predominant in the labour markets across states and regions.
  • The migration rate is likely to increase in future.
  • The services sector has been primary driver in Indian growth since 2000. Software, IT, IT-enabled services, businesses, and financial services have significant roles.
  • Each year 7 – 8 million youth (70 to 80 lakh) are added to the labour force.
  • Educated youth have experienced much higher levels of unemployment. In 2022 unemployment rate among graduates and higher was 6 times higher than that of the Secondary & Higher Secondary levels. Educated females had higher unemployment.
  • India has a large proportion of youths particularly Young women who do not have education, employment or training. (where is Beti padhao beti bachao?)
  • Youth fare poorly in Bihar, Jharkhand, Uttar Pradesh, Rajasthan, Madhya Pradesh, Assam, Odisha and West Bengal.
  • A large proportion of highly educated young men and women including the technically educated are overqualified for the job they have.
  • According to a ToI report, 3,700 Ph.D. holders, 50,000 graduates, and 28,000 PGs had applied for 62 posts of messengers in UP police. The post requires a minimum eligibility of Class V. What a pathetic condition!

The report has given 5 missions as Emerging policy agenda

Mission 1: Make production and growth more employment-intensive.

Mission 2: Improve the quality of jobs. And have an inclusive urban policy for migrants.

Mission 3: Overcome labour market inequalities.

Mission 4: Make a system for skills training and active labour market policies more effective.

Mission 5: Bridge the deficits in knowledge of labour market patterns and youth employment.

Our recommendations: 

These are good recommendations. To translate them into practice we propose the following.

Provide more jobs in Government, public sector and public services.

Look at the Public sector Employment percentages below:

Norway – 30% Denmark-  29.1% Sweden -28.6% Finland – 24.9% France – 21.4% Canada – 18.2% Greece – 18% UK – 16.4% Spain-  15.7% US – 15.3% Italy- 13.6% Turkey- 12.4% Germany-  10.6%.( As per World Atlas 2017)

As per ILO Statistics given in Wikipedia, Australia- 28.9% Belarus – 39.3% Bhutan – 25% China – 28% Cuba – 77% Germany – 78.7% Russia 40.6%

India is one of the lowest in providing public sector employment which is only 3.8% (including government jobs)

The public sector provides permanency in job, leave, perquisites, gratuity, provident fund and pension which leads to quality of life, access to credit, education and respect in society. Reservation policy is also implemented.

At least one person per family should be assured a government or Public sector job.

India should aim at providing at least 10% of the Eligible people a public sector job.

Just by increasing the student-teacher ratio and making education up to Higher Secondary free with Government support for salary including in private schools- we can ensure 100% free and compulsory education. This will need 13.26 million or 1.326 crore teaching jobs for 265.2 million students at 1:20 Ratio. (Statista 2023)

At present, we have only 96 lakh teachers. So we can provide jobs for 36 lakh teachers immediately.

In Healthcare there is a huge scope. According to National Medical Mission, there are 13 lakh allopathy doctors, 5.65 lakh Ayush doctors and 38.14 lakh nursing personnel.

Per capita doctors in India are 7.3 and per capita nurses and Midwives are 17.3%.  In Cuba it is 84.3 and 75%. In Sweden 70.6 and 215.9, Germany it is 45.2 and 123.5, Argentina it is 39.0 and 54.5, Russia it is  38.3 and 62.4, in the US it is 35.6 and 124.7, and in the UK it is 31.7 and 91.7.

Very soon we are going to be the world’s third-largest economy we say. So our health care should be at last similar to that of the UK which we will overtake soon or China where the per capita doctor and nurses ratio is 23.9 and 33.0

There is scope to have at least double the number of doctors and nurses/midwives which means, 18 lakh doctors and 38 lakh nurses/midwives or more.

Similarly, jobs can be added in Government departments, Railways, the Electricity sector, Transport sector by increasing public Transport and financial services. In banks, there are 33 lakh business correspondents as per the RBI. And there are only 15 lakh employees. Immediately you can create 33 lakh permanent jobs in Banks.

The IT-related services with AI, IOT and Machine learning maybe able to create jobs too. Why can’t the public sector provide these services?

The other public sector enterprises too can create lakhs of jobs.

There are at least 6 crore MSMEs. If they are encouraged to expand with Government support and easy credit, every year they can create 6 crore jobs. Govt should ensure permanency, PF, Pension and Gratuity for them.

Agriculture sector if provided with adequate support as MSP, Mandis, technology and guidance can create large-scale employment through integrated farming, food storage, food processing, animal husbandry, fisheries and allied services.

Privatisation should stop. PLI without job creation must stop; the Government should be in business to provide jobs and social security to its people.

The Taluk development models, the Block development models, the model of Providing Urban Amenities in Rural Areas (PURA proposed by Dr. Abdul Kalam) can be modified into a Decentralised Resource-Based Economic Development Model. The Local Self Governments if empowered with powers and finances will create large-scale employment. Converting waste to wealth itself can create lakhs of jobs. There are excellent opportunities if we have the will. A small increase in income tax for the rich, corporate tax and wealth tax for the rich will be enough to provide education, health and other services. What we need is a political will.

For employment generation, the path formation process demands selective delinking from the import-dependent mode of living. The governments will have to push the multi-level rural and urban economy at the national level towards the path of ultimately challenging the big business-dominated economy itself. The rural industrialization pathways would need a systematic implementation of the vision for development and of the perusal of strategies capable of

1) bringing down the costs of logistics and communication, promoting agroecological approaches capable of enabling area-based integration of primary, secondary and tertiary production to generate more jobs at the district and state level,

2) prioritizing the development of co-location of production focused on the development of co-products and by-products resulting in integrated development of the town and village enterprises run by local entrepreneurs, peasants, artisans, workers and professionals,

3) achieving technological convergence and upgrading to pursue the ecologically coupled integration of services, industry, and agriculture to generate jobs for the local youth,

4) creating diversified and integrated systems of production to prioritize local resource use, innovation system development and market creation for the use values closely connected with the basic needs satisfaction and demand formation processes of local populations as well as urban working class requiring access to public infrastructure and

5) developing the capabilities and consciousness of farmers, rural labour, artisanal labour and urban workers to enable them to obtain success in the upgrading of local and regional economies as systems-in-itself.

Thomas Franco is the former General Secretary of All India Bank Officers’ Confederation and a Steering Committee Member at the Global Labour University.

Dinesh Abrol is currently with the Transdisciplinary Research Cluster on Sustainability Studies at Jawaharlal Nehru University, Delhi. Before this, he was with the National Institute of Science Technology and Development Studies (NISTADS), a constituent establishment of CSIR from where he superannuated as Chief Scientist in 2013.

Centre for Financial Accountability is now on Telegram and WhatsApp. Click here to join our Telegram channel and click here to join our WhatsApp channel and stay tuned to the latest updates and insights on the economy and finance.