India now prides itself on outpacing China as the world’s fastest growing major economy. National income or gross domestic product (GDP) has crossed the $2 trillion mark. Prime Minister Narendra Modi has vowed to turn India into a manufacturing powerhouse, remove bureaucratic sloth and make the country more investor-friendly through initiatives such as ‘Make in India’. At stake is a key election promise: To lift the lowest living standards by creating jobs for about 120 million young Indians who will enter the workforce over the next decade or so.
The government wants to boost the share of manufacturing in the country’s GDP to 25% from about 15% now, bringing it closer to China’s 32%. But China’s thrust towards manufacturing came along with an unrelenting focus on more hiring. Asia’s largest economy created 64 million jobs during the country’s 12th five-year plan period, between 2010 and 2015. India presents a stark contrast. Data suggests that factory floors — the large plants as well as the tiny one-room units — aren’t really adding jobs to cater to the pipeline of people joining the queue.
According to government estimates, during 2005-12, India added only 15 million jobs, a quarter of the figure added in the previous six years. The actual pace of job creation in India is a tiny speck compared to the scale of the challenge. According to the latest Asia-Pacific Human Development Report, only 140 million, or less than half of the 300 million who entered the labour market between 1991 and 2013, found jobs. The report warned that India was likely to see a severe shortage of jobs in the next 35 years. Recently released government data also showed that employment generation in eight key sectors has slowed down to a seven-year low in 2015.
While industry is creating jobs, too many are in the informal sector, which accounts for 84% of the total. There is no gainsaying the fact that the informal sector needs a critical overhaul; the primary consequence of informal growth is low productivity. If all the job creation happened in the formal sector, India would have probably seen higher growth rates.
All these mirror the constraints of an economy and society caught in a peculiar flux, the sort which may well chime with sociologist Zygmunt Bauman’s analysis in Wasted Lives. Bauman classifies modern society as one that “cast[s] employment as a key — the key — to the resolution of the issues of, simultaneously, socially acceptable personal identity, secure social position, individual and collective survival, social order and systemic reproduction.”
A productive job is the best form of social inclusion. There cannot be two views about it. It is for the government to turn the focus of public policy discourse decisively towards job creation.