Indian elections: failure on jobs front will sink Modi government

All the hype about Indian prime minister Narendra Modi’s schemes and ‘nationalism’ will not wash away the pain of joblessness

March 17, 2019 by Subodh Varma
Narendra Modi and his electoral machinery is blissfully unaware and silent about the catastrophe on the employment front. Photo: Indian Express. Image used for representational purposes only

With weeks to go before the parliamentary elections in India, the single biggest challenge to the far-right Narendra Modi comes from his government’s failure to address the raging jobs crisis. Recent opinion polls, including one by a TV news channel that is otherwise quite sympathetic to the Modi government, show that employment is identified as the single biggest issue by voters across the country. While the recent air strikes by the Indian air force in Pakistan and a project inauguration blitz by Modi – 157 projects  have been “launched” between February 8 and March 7 – has hogged media space, the unaddressed issue of joblessness is continuing to worry most people. And, it is bound to affect voting behavior in the coming weeks.

As of March 11, unemployment stood at 6.9%, according to Centre for Monitoring Indian Economy (CMIE). It has been in this range continuously since the end of monsoon, reaching a high of 8.6% in the week ending on February 10. A recent harvest has brought it down slightly but sustained unemployment at this scale and sweep is reminiscent of economic distress in the early 1970s.

Although Modi and his associates have been repeating the discredited numbers of Employees’ Provident Fund Organisation (EPFO) enrollment or how many vehicles were sold or hotels started, CMIE data on labor participation rate (the share of working age population that is employed) shows virtually no increase in the past two years. In fact, it has dipped slightly to 42.7 per cent in February 2019, compared to 45.3 per cent in January 2017. Since the working age population is constantly growing, this means that the absolute number of persons working is declining – a bizarre condition for a country supposed to be the fastest growing major economy in the whole world!

The chart below shows the stagnation in number of employed persons in the country and the dip in December 2018. This is from CMIE data which is based on a household survey, and thus covers all manner of employment, including informal or gig economy jobs.

chart%201.png

(1 crore=10 million)

So: employment is not increasing, as this chart depicts. That leaves people with two options, either stop looking for work altogether and drop out of the workforce, or continue to seek work actively. This latter category is what is known as ‘unemployed’. Surveys will find out this number, often not estimating those who have become frustrated or discouraged and dropped out.

Now, here is a look at the jobless numbers. Again, converting the CMIE data to numbers, we see a dramatic increase in the number of unemployed people in just the past one year. Latest estimates for December 2018, put the figure at nearly 7 crore persons, as shown in the chart below.

chart2.png

The rising trend, and the staggeringly high numbers are evident. This is too big a crisis to be washed away with some data juggling or dodgy arithmetic.

There is another aspect of the jobs crisis that neither analysts nor Modi and his advisors are thinking about. That is the wage crisis which is directly linked to the lack of jobs.

Poor people only temporarily drop out of the employment market, say for a couple of months during a lean season. Only the middle class can afford to start attending some course or training while they look for jobs, thus not getting counted as jobless.

For the vast majority of our country folk, no work is not an option. They take up some work or other even part time, seasonal, irregular or very low paying, just to survive. So, there is a metastasis of low paid, back-breaking work. This can be agricultural work, or construction or domestic work or simply pulling rickshaws to earn a few rupees. This is nothing but disguised unemployment because people are forced into subsistence work in the absence of decent jobs. There are no recent estimates for the extent of such work but a National Sample Survey Organisation report in 2011-12 had indicated that as much as 35% of the workforce is under-employed in this manner.

Since Modi and his electoral machinery is blissfully unaware and silent about this catastrophe that is happening every day, and since the media too is blithely pretending that there is no problem as long as we are doing well in ease of doing business rankings, it is safe to say that Modi and the BJP are headed for a surprise of their lives when votes are counted on May 23 this year.

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