New Delhi: India consistently ranks high among major countries in economic growth but its record in employment generation has been underwhelming and thus there is an urgent need to craft a government policy, adequately supported by the budgetary resources, to promote robust employment generation, says a report.
“Our analysis of CMIE-CPDX reveals that five million men lost their jobs between 2016 and 2018, the beginning of the decline in jobs coinciding with demonetisation in November 2016, although no direct causal relationship can be established based only on these trends,” according to the report — “State of Working India 2019”, released by the Centre for Sustainable Employment, Azim Premji University, Bengaluru.
It also observed that unemployment, in general, has risen steadily post 2011. Both the PLFS and the CMIE-CPDX report the overall unemployment rate to be around 6 per cent in 2018, double of what it was in the decade from 2000 to 2011.
Also, India’s unemployed are mostly the higher educated and the young. Among urban women, graduates are 10 per cent of the working age population but 34 per cent of the unemployed. The age group 20-24 years is hugely over-represented among the unemployed, the report released here on Tuesday said.
Among urban men, for example, this age group accounts for 13.5 per cent of the working age population but 60 per cent of the unemployed. In addition to rising open unemployment among the higher educated, the less educated (and likely, informal) workers have also seen job losses and reduced work opportunities since 2016.
In general, women are much affected than men. The first few months of 2019 have been unusually eventful for labour economists and statisticians in India. The ongoing controversy over job creation received a fresh impetus early in the new year with the ‘leaked’ findings of the newly instituted Periodic Labour Force Survey (PLFS), which showed that unemployment rates had risen to an all-time high of 6.1 per cent in 2017-2018, the report added.
The Centre has enough fiscal space to adopt a robust employment generation policy. Even a doubling in the outlay on MGNREGA would hardly be profligate.
The leaked PLFS report came on the heels of considerable uncertainty about the state. The biggest challenge India faces in growing robustly, with or without fiscal expansion, is the challenging global economic environment and consequent sluggish growth in exports.
Anemic exports combined with strong domestic growth tending to result in higher imports, will cause the trade deficit to widen and exert pressure on the BOP.
Rising trade deficits will need to be balanced by higher capital inflows, which will increase the vulnerability to unfavorable developments in global financial conditions.
Alternatively, imports have to be lowered. That is, monetary and fiscal policies will have to tighten, bringing down domestic growth. Escalating trade tensions and a rollback of globalisation would only make matters worse.
While India needs to find ways to grow its exports more rapidly, it is important to be realistic about the prospects, given the global backdrop.
Thus, India’s policymakers need to craft a proactive, comprehensive policy to overcome the BOP constraint on growth.
It is not as if India is a laggard. India’s export growth, both in the dollar and real terms has largely tracked that of the broader emerging market group. (UNI)
