Indian economy
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More than 12 million Indians join the labour force every year, right? Wrong. This statistic has been used so often that it’s become gospel truth. Labour economist Radhicka Kapoor points out that it’s an outdated number. “That figure is from NSSO rounds between 1999-2000 and 2004-05. The NSSO rounds between 2011-12 and 2017-18 show the figure is over two million (20 lakh) a year,” the economist tells me.

While the unemployment figure is rising, the number of people entering the workforce is declining. This is also reflected in the labour force participation rate, which includes people who are either currently employed or looking for employment. This figure is also declining, more so for the urban youth.

That’s an interesting paradox. With more unemployment, the number of job seekers should also swell. But that is not the case.

What explains this paradox? The people dropping out of the labour force are, in all likelihood, those who have given up on finding employment. They are ‘discouraged workers’.

This helps us understand why we don’t see mass protests against rising unemployment in India. People protest when they think it can result in some success. There has to be a sense that they can get what they are asking for. But the state of the Indian economy is so bad that people are giving up on the hope that they could find work. They are returning to their homes and villages, surviving on odd jobs, subsistence farming or living off joint family incomes – stuff that are often not recorded in surveys.


Also read: BJP only talks about Hindutva, say voters across Jharkhand towns amid job loss & slowdown


Protesting the possible 

People protest over violence against women because they think the government can do something about it. There’s public resentment against rising onion prices because people think the government can do something to reduce it. People protest for change in reservation status to get more government jobs because they think it is possible.

There are other reasons, too. The worst hit by rising unemployment seems to be the landless rural poor, and they are often not organised enough to protest. Ideally, the opposition parties should be giving them voice but the opposition is the most under-employed. Yet, we see this reflected in rising demand for work under the National Rural Employment Guarantee Scheme (NREGS).

India’s unemployment rate, according to the Centre for Monitoring Indian Economy (CMIE), is 7.48 per cent in November 2019, a sharp improvement over the previous month’s figure of 8.45 per cent. More telling is the labour force participation rate, which is still falling.

While rural unemployment nearly doubled between 2013-14 and 2017-18, urban unemployment increased by about 50 per cent in the same period. Perhaps it will take a lot more urban unemployment for university youth to start protesting because they don’t see any hope of getting a job — like the rural landless labour. The good news is that, according to latest figures, India’s urban unemployment rate is beginning to fall. Nevertheless, an unemployment rate of over 9 per cent is very high, and would cause widespread social unrest in most parts of the world.


Also read: As India becomes de facto Hindu Rashtra, BJP looks for new ways to polarise voters


Collective silence 

There has also been a rise in the number of unemployed among educated youth, in both rural and urban India. These days, in India’s villages, you can meet middle-aged people who would ask you why they should educate their children if there are no jobs. But such questions don’t result in mass anger, the sort you would see about inflation.

“Inflation affects everybody,” says Mahesh Vyas, the managing director and CEO of the Centre for Monitoring Indian Economy. “Out of 100 people, all 100 are affected directly by food inflation. But a 7 per cent unemployment rate means only seven are unemployed.”

That explains the absence of collective social angst against unemployment. “People also tend to blame themselves for not getting a job. Maybe I wasn’t good enough, maybe I have bad luck, or the wrong caste, maybe I can’t find a job because I don’t have the right connections,” says Vyas.

The absence of collective angst, the feeling of insurmountable despair — none of this means the unemployed aren’t unhappy.


Also read: Why there has been no big social unrest in India to reflect inadequate job growth


Looking for hope 

The absence of protest is not the same as being happy, or even satisfied. If the situation is so dire that people have given up on the possibility of finding employment, it means they are looking for hope.

Narendra Modi gave them hope in 2014. As prime minister, he failed to live up to those hopes, at least as far as job creation goes. In 2019, the opposition seemed worse than a failed Modi. A reporter asked unemployed youth in Bihar why they were voting Modi in 2019 even though Modi had failed to find them jobs. They didn’t have to think of a reply: will Rahul Gandhi give us jobs? They even added that if anyone might give them jobs, it was Modi.

In other words, India’s high unemployment might start reflecting in its politics only if and when there is a new leader who can give people the hope that s/he knows how to create jobs. Anyone can stand up and say I will give you jobs, but people will buy it only if the promise seems credible. We need a leader, therefore, who has some track record in job creation, or some past experience that can convince us that this person can actually turn around the economy.

Is there any such leader from any party in India today? Can Arvind Kejriwal or Amarinder Singh or K.C.R. Rao or Nitish Kumar or Yogi Adityanath know how to create mass employment? Alas, nobody. All they know is state welfare programmes.

India’s political class needs to stop waiting for mass protests against unemployment. Instead, it needs to start talking about private sector job creation as a political objective, US-style.

Views are personal.

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33 Comments Share Your Views

33 COMMENTS

  1. You are reading a Print paper version of “Go to Pakistan”. You do not like so and so leave, do not read him. Sheesh, so childish!.

  2. The Print and many of its sisters are simply opinion sites. They don’t pretend to write analytical notes. How many times do we see data, information and analysis in their articles. These days even the Government does not seem to use data. All of us have to simple look at Consumer Confidence Survey of the RBI and then talk about what people’s concerns are. It is a 13 city survey. I saw RBI referring to it for the first time during the October meeting. The supreme leader and the cronies, including many of us, lie in our own face. What is the big deal in being a 5T economy when millions will and are continuing to suffer from malnutrition, evening after reaching 5T. Shivam’s articles are not very different from what Mr Gupta writes. Even ET and other business papers write not differently – they are simply there to serve vested interests or ideology. I always remind myself of their approach to writing, before I read.

    • I don’t understand your point.

      If you see under what head this article is published, it is Opinion. I think it’s pretty clear. There is a separate section for Economics.

      It’s also not correct to say that all publications write Opinion pieces only. Ninnan in this publication and Gulati in Indian Express are good examples of writing that combines facts with a style that is more if an Opinion piece – what you call analytical notes.

      India’s main problem is redistribution of wealth. So even in a 20tr economy you’ll have people suffering from malnutrition.

      The BJP government is cutting funding for education (Rs. 3000 crores) but goes ahead splurging on Defence, thousands of crores.

      • Thank you, Rajiv. I did not mean to say that no one is writing analytical papers. And that is why I had mentioned “The Print and many of its sisters”. You are absolutely right that it is about distribution. I would like to add – it is about distribution of opportunity to start with – how do we ensure that all of us have equal opportunities. the problem of wealth or income distribution comes in later. if the elite get to fill up the most important positions, the equity in providing opportunity is gone. I also agree with you about 3K cut. it is shameful that we cut education budget when the man spends ‘000s of crores on self-publicity and the even the CMs buy jets for travelling a distance of 500 kms or near about. Such choices amuse me, particularly the fellows tell us that they are like fakirs or simple men who know what poverty is all about.

        • Lost opportunity is not always unfair. A retard is mentally slow but otherwise physically OK. With great effort we got him a job as a waiter in a eatery. On a surprise visit to see how he is doing, we found him in the kitchen washing plates and glasses. On further query the manager said he was OK but today the guest/customers were too important and he was afraid the “slow” waiter would spill something on the guests. Was he fair.? Will he ever get a chance, Anecdotal survey says 50/50. yes/no.

      • Maybe it’s getting ready for war. After the war the population will definitely diminish and the remaining will find many jobs to reconstruct the ruins.

  3. The answer is pretty much summed up in these lines :
    {“Out of 100 people, all 100 are affected directly by food inflation. But a 7% unemployment rate means only seven are unemployed.”
    That explains the absence of collective social angst against unemployment. }

    Yet it seems The Enlightened opinion makers like the author of the column want to dictate on what issues ppl should protest and on what not. Most Protests like Arab Spring, HK , Anna Hazare’s India Against Corruption, or Delhi’s Nirbhaya protest do not need serious contemplation by the protesters it simply happens because they feel injustice deep within.

    Protesting involves cost in terms of time & energy and even money. People protest when certain injustice becomes intolerable, crosses tolerable threshold. The absence of protest for unemployment is indicative that the threshold has not been breached.

  4. Shameless Liars…
    Job is not just about creating Engineers or Doctors .. there are millions of other jobs as well… we need to look into dignity of labor… but these shameless morons think only White/Blue collor jobs are the only jobs!..check your brain checked!

  5. We had a set of govts that used piss in corner of our house and the stink was bad. Everyone blamed the hell out of them. So now we have got a govt thats shitting right in the center and no one simply cares.

  6. Mandal changed everything. Now all such protests are caste based. In fact Indian politics is all about continuance of caste supremacy and overcome its threats.

  7. How do you manage to write third rate articles time and again. You guys are not in a position to hypothesise something. You should stick to simple reporting and simple analysis. Have you ever recruited anyone? Please recruit delivery personnels for anything less than 23K a month? Try getting skilled man power such as plumbers and carpenters. Or try hiring high skilled software engineers or doctors. The area where employment is hard to come by is easily replaceable white collar jobs (accountants, entry level teachers , quality control engineers at certain industries etc.).

    So please do some ground research before hypothesising. Or better leave the hypothesizing to experienced hands – P.Chidambaram can hypothesize but you can not do

  8. Most of our politicians are village boors. They cannot see beyond their collective noses. They don’t have the faintest idea about job creation, sustainable development.They don’t take advice from people who can guide them. This is especially true of the present central government.

  9. It is true that the economy needs to be revived. However this article uses childish logic like – people have lost so much hope that they see no point in protesting, Do we really have credible figures of unemployment? The Finance Minister has taken several measures lately for economic revival. We expect more measures leading to the budget that enhance consumption – production – employment cycle. This article is rather superficial in its content.

  10. Dear Mr. Shekhar Gupta,
    For ages, this chap has been writing crap and both the quality of his writing and the depth of his arguments/statistics fail to meet even the lowly standards of quality that your portal follows (leaving out a decent article once in a while). Am sure you must be paying him something (even if peanuts) for writing. I am sure, even for peanuts, you can find much better writers.
    To summarize, please do your portal a service by a formal goodbye to this jerk.
    Thank you

    • India has always had a poor labour force participation rate, especially compared to its SE Asian neighbors. There are several reasons for it. A change in that statistic alone explained by

      “The people dropping out of the labour force are, in all likelihood, those who have given up on finding employment”

      is like throwing a dart hoping to find a bullseye. This is lazy intellectualism.

      Moreover, it could have been easily avoided. One could have conducted interviews and surveys etc even an anecdotal narrative would have been better.

      To help the author out, one should perhaps look into the dissatisfaction around NREGS and the fact that the scheme is being poorly implemented and incompletely funded. The author could probably make their headline by exploring this issue alone.

  11. Shivam is out of depth on serious economic matters and it shows. His juvenile analysis is comical and made up over an afternoon tea.

  12. We will think of which opposition leader can create millions of jobs during the next general election campaign. Till then, there is a popularly elected government which has to work on it, if 2014 – 2024 is not to go down in our modern history as a wasted decade. 2. As for people not protesting against unemployment, was that not at the heart of the Jat / Maratha / Patel agitations ? If the electoral mood is changing, both unemployment and economic distress lie at the heart of it. 3. So much effort and political capital being expended on ideology driven issues, even as real issues are becoming more intractable.

  13. Does this great article absolve the past 70 years of congi rule?
    And nehruvian socialism behemoths like public sector white elephant?
    Why cant the trade unions mostly left support amendment to industrial disputes act,?
    Blaming the BJP govt is not a solution
    Be the answer not part of the problem

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