The jobs crisis is not merely an economic mishap, it signals the destruction of India’s future

Police detain protesters during an agitation against the Agnipath army recruitment scheme in New Delhi, in June 2022. This is only the latest in a series of protests related to India's jobs crisis. SONU MEHTA/HINDUSTAN TIMES/GETTY IMAGES
05 July, 2022

In the build-up to the 2014 general election, Narendra Modi, the prime-ministerial candidate for the opposition Bharatiya Janata Party, rode on the promise of millions of jobs for youngsters. At a rally in Agra, in November 2013, he mocked the United Progressive Alliance government for not delivering on jobs. Five years on, as prime minister, he famously said, “If someone opens a pakora shop in front of your office, does that not count as employment? The person’s daily earning of Rs 200 will never come into any books or accounts. The truth is massive people are being employed.”

The National Commission of Statistics would perhaps answer Modi’s question with a no. In January 2019, PC Mohanan, the acting chairperson of the NCS, and his colleague JV Meenakshi resigned and publicly said that they were doing so because unemployment data was being concealed. It was widely speculated that the report was being delayed due to that year’s general election. Mohanan told India Today that the National Sample Survey—the first since demonetisation—was supposed to be released in December 2018 but, despite the NCS’s recommendation, had not been published yet. The report was kept under wraps and officially released only months after the election results were out. It revealed that India’s unemployment rate had risen to a 45-year high of 6.1 percent. Youth unemployment stood at astronomically high levels, between thirteen and twenty-seven percent. More disturbingly, people were moving out of the workforce in droves. This was before COVID-19 struck. In the April–June quarter of 2021, youth unemployment in urban areas was 25.5 percent.

During the pandemic, the drip of people opting out of the workforce turned into a flood. The labour force participation rate—the proportion of those of working age who are seeking jobs—was 47 percent in 2016 and sank even lower, to 40 percent, in December 2021. It is 68 percent in China and 58 percent in Bangladesh. For Indian women, the figure is even lower and among the lowest in the world, at around twenty percent. The low participation rate puts a veil on unemployment data, which only takes into account those seeking jobs and could, therefore, be much higher. Also, the very high numbers of agriculture workers and those in self-employed categories denote underemployment, rightfully called disguised unemployment.

After campaigning in 2014 on jobs and claiming to bring improvements in the material conditions of millions of Indians, the Modi government, through its policies and orientation, has rendered the picture grimmer. There are two aspects to this. The first is the destruction of the informal economy through demonetisation in 2016. The soul of India’s economic endeavours, whether for innovation, creation of jobs or enterprise, the informal sector was crushed by demonetisation and then nailed further into the ground with convoluted goods-and-services tax rules, which especially penalised micro and small-scale units—the very sectors that provided the bulk of employment to Indians. The economy is yet to recover from the destruction wrought in November 2016.

The Modi government’s tactic for its failure to create regular jobs is to hide behind the fig leaf of “self-employment,” but its pakora model is at odds with India’s reality and the dreams of its young. In 2015, Modi mocked the National Rural Employment Guarantee Scheme, the world’s largest public-works programme. The idea of developing sensible work-oriented programmes was minimised and questioned as a desirable goal. However, the Modi government not only continued the NREGS but also sanctioned additional funds for it. The scheme has helped sustain millions of otherwise unemployed workers during the pandemic.

Poor countries generally opt for a large public sector for a variety of reasons. Public-sector employment enables the setting of industry standards for decent wages and benefits, important in the face of a private sector always quick to squeeze wages. Historically, India’s public sector came about due to the private sector being unable to undertake big tasks deemed vital for the development of the country. But there has been a sharp slide in public-sector employment in recent years. Between 2014 and 2020, the number of regular central-government employees has fallen from 3.3 million to 3.13 million, while the number of public-sector vacancies has doubled, from less than half a million to a million.

The inability of the public sector to provide jobs has the youth lining up for private-sector employment, but the hit the Indian economy has generally taken in this same period has left the private sector incapable of producing both the requisite quantity and quality of jobs. Restlessness has been building up for some time now. The recent protests by army aspirants against the Agnipath scheme are only the latest in a series of several such outbursts in India. In 2015, protests for work opportunities and reservations across several states, including Haryana, Gujarat, Maharashtra and Andhra Pradesh, were classified as “unrest.” The impact of this unemployment can be seen in the increasing participation of young people in lynchings, the rising frequency of public “anger” in the form of mob attacks on the police and officials, and the availability of large numbers of youth to carry out communal violence. The common element across the unrest has been fodder in terms of young people available to hit the streets.

A report by the Confederation of Indian Industry, this April, warned that India is wasting its demographic dividend. The demographic dividend is defined as the potential growth in a country’s economy resulting from a change in the age structure of its population. This refers to a young workforce, ideally getting good health and education before being fruitfully employed to create conditions to build a prosperous nation. This has been witnessed in China and in the East Asian economies. The report pointed out that the time to play on this large workforce in India is short—while the working-age population is likely to rise by 101 million between 2020 and 2030, only 82 million are expected to be added in the two following decades, while the working-age population will begin declining after 2050. The rapidly falling fertility rates suggest that the window is set to close even more rapidly.

In the face of this, the Modi government’s stubborn refusal to recruit for government jobs since 2014 has made it clear that nourishing the demographic to produce a dividend has not been a priority. Pontificating on pakoras instead of giving people government jobs sent the wrong message to the private sector. It maximised profits—even at the height of COVID-19 hardships—at the cost of employing people. In India, this has translated into the demographic dividend already morphing into a demographic disaster.

The ominous implications of the callous model of contractualisation are most starkly evident in the context of it being used for the armed forces, the front lines of national security. But this is playing into a larger story. Persistent joblessness and the overall destruction of the demographic dividend in India is a spiral, bound to worsen India’s internal security. With this already playing out, India cannot hope to nurse ambitions of being a world power. It is impossible to be at any global high table in the face of the destruction of the one asset India reckoned it had: its young people.

The Modi government’s destruction of the economy is more tragic because of where Modi started from when he was handed the baton eight years ago. In a 2019 report studying multi-dimensional poverty, the United Nations Development Programme said that India lifted 271 million people out of poverty between 2005–06 and 2015–16, with reasonable achievements in nutrition, schooling, sanitation, access to drinking water, fuel and power, housing and child mortality. Modi had an opportunity to build on this, but his intention was to instead divide Indians between samshans and qabristans.

The jobs crisis is not simply about employment figures or the dreams of youngsters. Rather, India’s future is being squeezed and shrunk as joblessness is allowed to persist. It is deliberately not underscored as a governmental priority, unless as part of some pre-election brainwave. “If India does not create enough jobs and its workers are not adequately prepared for those jobs, its demographic dividend may turn into a liability,” the CII report said. That ship may well have sailed. India is living that liability today.