Overcoming the job jinx
Though the Indian economy is recording mentionable growth, employment opportunities in the formal sector remain numbered
When Prime Minister Narendra Modi was running for office, he promised to create 10 million jobs every year. The Modi administration has barely come anywhere near generating that number of jobs with the Indian economy expanding but the growth being essentially "jobless".
This shortfall was not focussed upon very elaborately in the early years of Modi's administration. As India has moved through 2018 towards the national election of May 2019, job creation, or the lack thereof, has become a contentious issue.
The government and its supporters – using data which now includes jobs that have moved from the informal to the formal sector of the Indian economy due to factors such as tax payments, government loans and healthcare coverage – claim that numerous jobs have been created recently. Opponents though assert that data is being manipulated to give the appearance of job creation while very little is done for the actual development of new jobs.
As a result, this debate about jobs has become more a matter of partisan bickering rather than a concerted and collaborative attempt to address India's very serious job creation and employment problem. Here are some facts about the nature of India's economy and the dimensions of that problem:|
India has a huge workforce of 470 million people with almost half of that workforce being self-employed.
Over 80 per cent of the Indian workforce is in the informal as opposed to the formal sector.
Approximately 12 million Indian youth enter the workforce each year.
The desperate lack of good jobs is captured by the fact that, in 2015, in Uttar Pradesh, 2.3 million youth applied for 368 low-level jobs of peons, requiring only fifth-grade educational qualification. The applicants for these jobs included 1,50,000 university graduates, 25,000 individuals with master's degrees and 250 with doctorates.
These are staggering numbers. The most critical one relates to the percentage of the Indian workforce currently employed in the informal sector. International Labour Organisation (ILO) recently released a report titled 'Women and Men in the Informal Economy: A Statistical Picture', in which it observes that for a country to be developed it must have a high percentage of its workforce in the formal sector which provides meaningful employment and benefits for employees.
According to the ILO report, India, with more than 80 per cent of its jobs in the informal sector, ranks much worse in this regard in comparison to other nations in the South Asian region, such as Bangladesh, Pakistan and Sri Lanka.
This is a formula for failure. For India to become a developed nation, it must have modern jobs, equipped workforce and an expanding economy. This cannot be achieved, as is currently being contemplated by the administration, by merely providing some nominal assistance to those holding jobs in the informal sector and then beginning to count those receiving that assistance as a part of the formal sector. What we desperately need is an approach that is truly transformational. This could be accomplished by creating and implementing a citizen-centred and competency-enhancing job creation master plan.
That master plan should be developed based upon a comprehensive, objective and strategic assessment, including a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis of India's current and future job situation and the employment and employability needs of India's citizens and employers.
As a part of this assessment, the plan should study how Japan and Germany transformed their economies after WW-II through a laser beam focus on technical and vocational education. It should also compare and contrast what China has done in terms of evolving its informal sector.
The master plan should clearly spell out a vision, goals, strategies, strategic action programmes, implementation requirements, facilitating factors, potential obstacles or barriers and critical success factors. It should present a detailed budget and cost-benefit analysis.
The master plan must be multifaceted, addressing all areas that are essential for building and evolving a modern Indian workforce and economy, including rural and urban differences, literacy enhancement, skill development, vocational and technical education, apprenticeship and mentoring, entrepreneurship, small- and mid-size business assistance, high-growth firm focus, public service employment as a means for propelling national and state-level initiatives forward, and, implementing a uniform job creation and employment measurement methodology.
India has many of the bits and pieces for job creation today. For example, it is an international leader in information technology driven by the private sector; it has the Make in India manufacturing focus driven by the government; and, it has numerous start-ups driven by fledgeling entrepreneurs. Bringing these pieces together into an integrated and coordinated master plan will solve the job creation puzzle in a manner that will make India and its people economic leaders of the 21st century.
(The author is an entrepreneur, civic and thought leader based in Washington, DC. The views expressed are strictly personal)