State job quotas are a symptom of a bigger unemployment crisis

Excellent study material for all civil services aspirants - begin learning - Kar ke dikhayenge!

State job quotas are a symptom of a bigger unemployment crisis

---

Read more on - Polity | Economy | Schemes | S&T | Environment

---

• Strong centre, parochial states: Despite a central govt. of BJP that is keen on centralising power across all of India, some of the states are going hyper on local economic parochialism. 
• Haryana example: The state legislated a new law requiring private employers to reserve 75% of new jobs (that pay upto Rs.50000 per month) only for local domiciled candidates (long stay or born here). Jharkhand is doing the same, and other states excited about it!
• India, a Union of States: India does not constitutionally create or allow such restrictive laws, as citizens are free to move and work anywhere. Add to that the huge business uncertainty this brings. As a state starts restricting industry's freedom to hire people by restricting the pool of potential candidates to choose from, workers will also stop moving across states. Efficient allocation of labour will come to an end, harming everyone! 
• Lack of good jobs: The key fact remains that India just does not produce the right number of good quality jobs. More thn 10 lakh people enter workforce each month, with fresh jobs being a small fraction of this number. 

1. Net result is mass unemployment in India
2. Most of it is visible (overt) but a lot of it is also disguised (under-employment looking like employment)
3. Large pools of idle men (mostly men) are wasting their productive lives
4. Social conflict is growing, as is crime

• A wrong growth model: Sadly, unlike other Asian peers, Indian growth model since 1991 did not stress on labour-intensive, job-creating economic growth. Due to multiple reasons combined, India grew its economy via high tech services (IT) and high end manufacturing. They don't create many jobs!
• State level reaction: Hence, states are now trying to restrict jobs to their own local people, who are their voters. This sub-national clamour will only grow, like an infectious disease. It's a race to the bottom.
• GST retarded the leverage states had: A reason states are desperate is that they lack the tools to attract new inward investments, especially after having surrendered their fiscal powers in the GST regime. So what to do? Raise the "ease of doing business", but that takes time. And that needs money for infrastructure also. 
• Wake up, Centre: The union govt. cannot stay blind to these new tendencies, as inter-state friction will grow in days to come. The economic pie is stagnating or shrinking. So a bad, zero-sum game will be played out in full force. So, it is only when the pie grows that everyone will have more to share, rather than fighting for lesser and lesser amounts.
• Dangerous historical lessons: Prof. Benjamin Friedman has reminded that historical periods of economic stagnation were breeding grounds for disharmony and conflict, and vice-versa for good times. It is time that the government wakes up to the urgent task of reigniting the economic engine, else fissiparous tendencies will only strengthen.

Read more on - Polity | Economy | Schemes | S&T | Environment

Join UPSC Self Prep course | Online Course (PT Gurukul)  | Covid Special Course | Join PT courses

* Content sourced from free internet sources (publications, PIB site, international sites, etc.). Take your own subscriptions. Copyrights acknowledged.