Is the unemployment crisis for real? (Jobs scene in India)

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

 Is the unemployment crisis for real? (Jobs scene in India)

---

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

---

• YES, IT IS.

1. All three are shrinking : The striking thing is that employment opportunities, formal sector jobs and labour force size are all shrinking in unison!
2. Serious concern, not a crisis : If we define a crisis that needs a sudden response, then we are facing a big concern, not a crisis. But the problem is deep, and will not go away on its own.
3. A big country : If a continuously expanding nation like India can ensure that new arrivals can join the workforce and get meaningful jobs, greater prosperity can be ensured, and growth can be even.
4. What if we don't? Then we lose that productivity, and end up becoming an unruly nation. Unemployed youth can easily become unsocial.
5. Insensitivity of the employed : They just don't seem to get the plight of those who are jobless. They often say that it's the problem of the jobless (lack of talent etc.)
6. Statistics give the clue : 
1. We are facing big investment deficits, with new investment proposals at their peak in 2010-11 (Rs.25 trillion) and just Rs.11 trillion in 2017-18,
2. In 2018, the number of persons employed reduced by 1.1 crore to just 39.7 crore in December 2018, 
3. On average, 40.2 crore were employed in 2018 compared to 40.6 cr in 2017.
7. Reducing LFPR : This reduction in jobs is not showing up in unemployment but it is showing up as a drop in labour force participation rate.
8. Unemployment versus LFPR : Rise in unemployment is bad, but a drop in LFPR is worse. The first shows a shortage of jobs (compared to people looking for jobs), but the second shows a fall in number of people looking for jobs. That means hopelessness.
9. Do not rubbish sound statistics : If the govt. decides to reject all statistics that are shown, we are creating a bigger crisis than what exists. 

• NO, IT IS NOT.

1. Wrong criticism : People are unnecessarily crying over the unemployment issue. It is because of wrong interpretation of labour market.
2. Sampling biases : Recent surveys telling us of a crisis are wrongly designed, and have sampling biases. They are politically motivated!
3. CMIE's wrong claims : The claim that total working population went down by 1.1 crore in 2018 is based on a sample of 1.4 lakh respondents for a nation of 135 crore. Even a sample of 20 lakh would be insufficient for India.
4. What is wrong? Such surveys have given more weight to States with higher populations but where less formal jobs are being made. So, Maharashtra and south India are creating more formal jobs than say, UP or Bihar.
5. Cities : These create more jobs, but have lesser weights assigned.
6. Use proxy databases : Data like vehicle sales, annual I.T. department reports, MUDRA loan disbursals give a hint of markets like transport, professional sector, small scale entrepreneurship, respectively. Easily we can gauge employment figures.
7. Our estimates : 
1. India needs 1.5 cr jobs a year. Nearly 2.5 crore young people reach 21 years of age each year.
2. At least 40% may not want formal sector jobs but go into agriculture of become homemakers.
3. The EPFO/EPS databases show 70 lakh jobs created annually. 
4. The transport sector creates 30 lakh annually, professional sector 10 lakh annually and self-ventures are 30-40 lakh annually. This is the magic of Ease of Doing Business and Make in India.
8. Where are the employees? If you talk to employers, they are not finding enough employees. The real problem is that wages are not high enough. Higher quality jobs are needed.

• MAYBE - YES AND NO.

1. Work is quality of life : Work decides the quality of life. Indians use jobs to earn a living, fulfil family responsibilities, and satisfy their aspirations. But such jobs that allow all (productive + good pay + healthy lives) are scarce.
2. NSSO survey leaked : It showed that unemployment rate rose to 6.1% last year. That may be because more young people are getting an education, and then the expectation of a "better job".
3. Finacially fortunate : Those who are well-to-do, choose to wait while they get a good job, others do not. They have to work.
4. Informal economy : Since one has to work to make ends meet, the informal economy keeps ticking. In India, more than 90% of those with jobs (farm and non-farm) are informal workers.
5. Underemployment a crisis : India is indeed facing this. We have low levels of productivity and low wages for many in the informal sector. Example - an engineer working in a mechanic shop.
6. Decline in LFPR : If underemployment persists, people drop out of labour force, as people become frustrated. NSSO data shows a LFPR of just 49.8% in 2017-18.
7. Solution :(1) Increase the quality of jobs by improving productivity in agriculture and in enterprises, (2) Align education and training to market demand, and (3) Make long term investments in human capital and skills, and social protection.
8. Unemployment and Underemployment : The second one is a bigger problem.

• Summary : Three perspectives on a burning issue - Does India have an unemployment crisis today?

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.