New Delhi: In an hour-long lecture in the memory of BG Verghese, veteran journalist TN Ninan spoke about India’s employment problem, and offered possible solutions to solve it, at the India International Centre, Delhi.
Ninan offered a contrarian view from traditional economists, arguing that the solution doesn’t lie in the manufacturing or service industry, rather the end game is agriculture, and batted for India to focus on improving its crop productivity. “Productivity per hectare is well below the standards achieved in other countries– whether it be potato, tomato, wheat, rice, cotton, mango– you name the crop, India’s productivity compares poorly, indeed very poorly. The gap between our productivity and the world’s best is positively embarrassing,” Ninan said.
The former Business Standard editor is regarded as an authority voice on India’s economy. His speech now makes for a rare insight into the heart of India’s economic conundrums, from one of its sharpest minds.
Ninan was delivering the BG Verghese Memorial lecture at the annual Chameli Devi Jain Awards organised by The Media Foundation. The prestigious award was won by independent journalist Greeshma Kuthar for her coverage of Manipur and Ritika Chopra of The Indian Express for her coverage of the Indian government and education.
While accepting the award, the two journalists recounted their career stories and objectives of journalists. Kuthar highlighted the work she has done as an independent journalist, which might not have made it to the pages of legacy media. Chopra underlined the importance of dedicated beat reporting, emphasising the potential of education reporting, a beat which is considered “non-glamorous”.
In the audience were journalists who came to support the winners. EP Unny and Raj Kamal Jha of The Indian Express came to encourage and cheer on Chopra, as well as Kuthar’s colleagues from The Caravan.
Before expanding on macroeconomic points related to India’s employment problem, Ninan paid homage to Verghese, his former colleague and friend. He recounted the struggle Verghese led under the Indira Gandhi government for editorial independence to finally getting fired on the steps leading to the Hindustan Times office, the paper he edited.
Ninan remembered Verghese as an optimist. “Verghese didn’t just curse darkness, he also wanted to shed light on solutions. In a profession full of cynics, Verghese believed that things could indeed be improved,” Ninan said, stating that his lecture too would be solution-based.
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Unemployment in India
At the beginning of his lecture, Ninan rubbished India’s unemployment figure of 3 per cent and said that India’s national sport is not cricket but “playing with numbers”, highlighting that the interpretation of macroeconomic statistics is now coloured by the political allegiance of an average economist.
“Government says unemployment is 3 per cent or less. They may or may not be correct, but in a broader sense, the number is plainly delusional, because only about 58 per cent of our population is in the working age bracket. In the past, this was higher at 65 per cent. The missing 7 per cent have joined those who are not looking for work– they’re simply out of the labour market. We’re talking of some 17 million people here,” he said.
He then highlighted that employment in agriculture in India is at 250 million people, but we produce too little. China’s agricultural production, he said, was higher while it employed fewer people. “100 million people could leave our farms, without agricultural output suffering,” he said, adding that there’s an excess number of people in farms because there’s simply nowhere else to go. “So naturally, 155 million people have registered under the National Rural Employment Guarantee Act.”
He went on to argue that the larger problem of India’s economy is not unemployment but the nature of employment. “So much of it (jobs) is providing low-value incomes. We have those people just above the poverty line, in their place, we have millions of people who lead uncertain lives on the edge, with no cushion of safety. They work for minimum wage instead of the more generously defined living wage,” he said.
Being true to the memory of his optimistic friend, Ninan then pointed out the silver linings in India’s economy.
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Bright spot
The former editor said that India’s labour markets are finding opportunities in regional imbalance, highlighted by the growing internal migration in the country.
He highlighted that states like Tamil Nadu and Kerala are now witnessing a shrinkage in their population, as their total fertility ratio drops below the replacement rate of 2.1 births per death. At 1.4 and 1.5 TFR, Tamil Nadu and Kerala respectively are seeing a transition in their populations with migrant labourers coming into these states. “Half the workers in Tirupur are now Hindi speaking. Most of us are not fully aware of the scale of the interstate migration. The 2011 census put the number at 41 million, which must be a much bigger number now,” he said.
Ninan underlined that migration raises income levels, as migrant labourers are now seeing their daily wages even cross the 4-digit mark. Migrants from North Indian states earn significantly more in Southern states. But migration comes with its cost, said the editor, as many children grow up without their fathers. The pursuit of jobs is taking men further and further away from their roots and breaking families.
The rise in contributions to the Employment Provident Fund Organisation, up from 45 million contributors a “few years ago” to 76 million now is the most reliable number to look at India’s growth story in the organised sector, he said.
“If these numbers continue, we could potentially have half the non-farm workforce in the organised sector in the next 5-7 years. This will bring about a qualitative change in our labour market and potentially drive up wages in the unorganised sector, and pull workers off the farms. Which is a very positive development,” an optimistic Ninan said in a monotone, heavy voice that he maintained throughout the lecture. He also rejoiced that in more prosperous states like Kerala, Punjab, and Haryana, the population engaged in fieldwork is declining.
While these are success stories, Ninan argued more substantive change is necessary. And he says India will find it in its agriculture.
Farmer producer companies
Offering a contrarian view to the traditional economic approach to absorb agricultural labour in factory work, Ninan said that industrialisation at the necessary scale might be wanting in India, and improving agricultural production might be India’s best bet.
He argued that India’s crop productivity remains extremely low and could be improved with some reforms. “An Israeli researcher who looked at mango plantations in India argues that India could multiply its crop yield by properly spacing out trees and intercropping in the spaces. It could double, even triple,” he said.
But more substantive reform in agriculture would come off the field, not on it, by fostering agro-based industries, Ninan argued. He gave examples of success stories of Sahyadri Farms and Mahagrapes in Maharashtra, Synthite in Kerala and coffee plantations in the Eastern Ghats near Visakhapatnam. These projects, he emphasised, need scale, like Amul.
“Looking at agriculture and agro-based industries as solutions to our employment problems is not to look backward, as one may think. Fish is Norway’s biggest export, and California’s almonds occupy 80 per cent of the world’s almond market. Our state governments should be doing far more to encourage the birth and growth of farmer producer companies, because building businesses, and exports from our agricultural base is a sure shot way of generating large-scale employment,” he said.
Ninan also batted for a basic income support programme for vulnerable groups, saying it would account for only 1 per cent of GDP, which could be recovered by slightly raising the Goods and Services Tax.
Proposing that the reach of artificial intelligence might prove as revolutionary as the discovery of electricity, Ninan argued for a policy framework around AI in the Indian context to be prioritised. He also highlighted the growing gap between employer and employee in the gig work era.
Ninan commanded the room for the hour that he spoke, ending the lecture with some light-hearted jokes, enjoyed by the economy enthusiasts in the room.
(Edited by Theres Sudeep)