Tackle the terror of unemployment with sound economic policies
By 2026, 64% of Indians are expected to be in the working age group of 15-59 years, giving us the benefit of having the largest workforce in the world. However, a nation’s demographic dividend is only realised when it is transformed into human capital - a task that the BJP has miserably failed to accomplishUpdated: Jun 07, 2018 12:07 IST
Whatever your political affiliations may be, there is one harsh reality that you cannot deny — India has been pushed into a demographic deadlock. On one hand, we have a cohort of aspiring young minds seeking gainful employment, and on the other, we face the threat of a weakened economy, trudging along at a pace far below its potential, and resulting in a deplorable state of unemployment, scarce job creation and a restive youth population.
The reason for this is patent — our government is too engrossed in Pakodanomics to deal with ground realities. In recent times, they have offered the following sound career advice to our children — become street vendors, milk cows, or set up paan shops. While I do believe that every job is equally important and worthy, I also firmly believe in employment commensurate with one’s level of education, skill and ability.
Let us first turn to numbers to understand the situation of employment generation in the nation. While 30,000 youth enter our job market every day, only 450, a meagre 1.5%, are employed. According to the labour bureau data, the NDA government created 421,000 jobs in 2014, 135,000 in 2015, 231,000 in 2016 (representing the first nine months, since the labour bureau changed its series in the last quarter), and 416,000 in 2017. Cumulatively, this adds up to 1,203,000 jobs over a period of four years — a far cry from their chunavi jumla of 20 million jobs a year. Meanwhile, in 2016, China generated 13 million jobs — approximately 50 times as many as we did. Add to this, the havoc wreaked by poor economic decisions such as demonetisation and the shoddy implementation of GST, and you have yourself a recipe for disaster. Now, four years into the NDA government, we have an army of unemployed youth — 31 million people pacing back and forth in search of jobs, according to CMIE.
This is particularly worrying in light of our demographic dividend. By 2026, 64% of Indians are expected to be in the working age group of 15-59 years, giving us the benefit of having the largest workforce in the world. However, a nation’s demographic dividend is only realised when it is transformed into human capital — a task that the BJP has miserably failed to accomplish.
It does not take an expert to know that the future of our nation lies in the hands of our youth. It is then upon us to reap the benefits of our demographic dividend by harnessing the latent potential we have. We must prioritise the need to generate sufficient employment opportunities for our youth. To achieve this, it is imperative that we focus our energy on developing a rewarding strategy for job creation. Let me share some of my ideas.
First, we must develop our labour-intensive industries, such as garment manufacturing, that have a high manpower to machine ratio. Simultaneously, we should look at industries with a high labour to capital ratio, i.e. for each rupee we invest, we must seek to generate the maximum possible number of jobs. This is especially the case in thus far unexposed sectors such as food processing, manufacturing, media and entertainment, that harbour untapped potential. To add to this, we should invest resources in building industries that offer a high indirect to direct job creation ratio. A prime example of this is tourism and hospitality.
The World Travel & Tourism Council notes that tourism generated $7.6 trillion — 10.2% of global GDP — and 292 million jobs in 2016, equivalent to 1 in 10 jobs in the global economy. Employment in the industry has a commendable multiplier effect along the value chain. For every job generated in tourism, job creation is spurred in affiliated sectors such as accommodation, F&B, transport, entertainment, and the upkeep of attraction sites. However, unfortunately, we have failed to take advantage of this sector’s unparalleled potential. Despite India’s rich culture, we only get a minute share of global tourists and revenue. In 2016, India received 8.9 million tourists, as against Singapore’s 16.4 million.
Second, we must recognise the importance of employment-focussed skill development. Here, I am not talking about the government’s failed Skill India programme that started out in 2015 with a target to train 500 million people by 2022, but managed to train less than 20 million between 2014 and 2017. Rather, what I have in a mind is a focussed mission to harness our potential with time-bound implementation. For this, we must build robust links between our academic institutions and India Inc, leveraging the National Skill Development Mission to converge the job-seekers with the job-creators.
Currently, Gas Authority of India Limited (GAIL) has partnered with Infrastructure Leasing & Financing Services Limited (IL&FS) to build three vocational training institutes in India, to develop industry relevant, placement-linked skill programmes. Their course amalgamates a range of important trainings to make students more employable. These include a month-long training at a workplace simulated lab followed by a month of apprenticeship, and enhanced by courses on compulsory life skills, English and computer literacy. In fact, GAIL-IL&FS go beyond just training to guarantee students their first job.
I brought this programme to my parliamentary constituency, Guna, establishing it through a public private partnership (PPP), and have been able to directly witness its scope and impact. However, the government needs to effectively expand this programme and implement it on a pan-India scale to truly reap its benefits. To this end, we should emulate and adapt Germany’s apprenticeship model. Germany has an unemployment rate of 3.7% — one of the lowest among OECD nations. Even during the Great Recession, while the German economy was debilitated, their employment was hardly impacted. It is widely accepted that they owe this, in large part, to their Dual Vocational Training Programme that has been established as a part of the German education system and is regulated by law. It links vocational training institutes with small and medium companies, affording students the opportunity to divide their time between the vocational school and work experience, during their three-year course. A similar set-up in India would enhance students’ skills, focusing their curricula on the needs and demands of the private sector.
It is also crucial to adopt a similar approach towards start-ups so as to incentivise innovation and ideation. Unfortunately, the government’s Start-up India has met the same fate as Skill India — they set out with a budget of Rs 10,000 crore to be utilised by 2022. Over halfway in, the government has managed to deploy Rs 600 crore, funding just 75 startups. Evidently, that is not enough. In this scenario, we must take the liberty of cherry-picking lessons from international examples.
As for incentivising startups, Israel has a great story to tell, The Israel Innovation Authority, an accelerator programme, provides funding to startups in their early stages, and offers a set of tools and insights to fast-track their management, business and marketing capabilities, resultantly easing and supporting the otherwise cumbersome process of entrepreneurship. As a result, Israel has become a leader in the entrepreneurial world. Perhaps, India should adopt a similar strategy.
Lastly, with 58% of our rural households involved in agricultural activities, we must dedicate our efforts to making farming profitable so as to attract our youth to the industry. To achieve this, we need to step beyond the traditional separation of farmer and businessman, instead converging them in the arena of food processing that has immense potential. India’s food consumption is valued at $370 billion, and is expected to touch $1 trillion by 2025. However, even as we rank among the top three nations in the world in milk, fruits, vegetables, and food grain production, 40% of total food produced is wasted due to inadequate facilities for transport, storage, processing and marketing. I can confidently say that if this surplus is aptly processed and marketed, there will be boundless opportunities to not just enhance farm income and diversify and commercialise farming, but also to generate employment opportunities. This is merely one way the fate of our agricultural industry can be realigned.
Today, India is at the cusp of a demographic nightmare, and it will take a series of dedicated efforts to lift our youth and our nation out of this despondent state. While the NDA government has pushed us into a phase of regression, the urgency for course-correction cannot be overstated. We must act immediately to tackle the terror of unemployment with sound economic policies and meticulously planned strategies to generate jobs.
Jyotiraditya Scindia is the Congress’s chief whip in the Lok Sabha
The views expressed are personal
First Published: Jun 07, 2018 12:04 IST