India’s growing unemployment rate is not just an economic challenge but a fundamental issue that threatens the nation’s potential to harness its demographic dividend. With one of the world’s largest youth populations, the lack of a coherent job strategy risks undermining the very growth the country aspires to achieve. Over the last decade, Prime Minister Narendra Modi’s economic policies have struggled to address this critical issue, resulting in what can be termed as “jobless growth.” The shift from rural to urban areas over the years saw many leaving agriculture in search of better opportunities in non-farm sectors. However, in recent years, this trend has reversed, with a significant portion of the population returning to farm-based employment. The rural workforce has surged from 42% to 46%, indicating a movement driven more by necessity than opportunity. Over 20 million people, unable to find secure jobs in urban areas, have turned to casual, self-employment in the unorganized sector. These are survival strategies, not the stable, secure jobs that contribute to long-term economic growth. The government’s portrayal of this shift as evidence of “job creation” is misleading. The recent Reserve Bank of India (RBI) report, which attempts to validate this claim, fails to address key indicators such as labour productivity, labour force participation rate (LFPR), and real wage growth.
PM Modi’s assertion of employment growth, backed by RBI data showing an increase from 596.7 million to 643.3 million, does not hold up under scrutiny. If this were accurate, we would expect to see a rise in social security and welfare expenditures, yet these have seen sharp reductions. For example, the Pradhan Mantri Shram Yogi Mandhan Yojna saw its budget allocation slashed from INR 350 crore to INR 205.21 crore, with actual expenditure by the end of 2023 standing at a mere INR 46.34 crore. Similarly, under the Labour Welfare Scheme, while the budget allocation increased from INR 75 crore to INR 102 crore, actual spending was only INR 20.25 crore. The National Pension Scheme for Traders and Self-Employed Persons fared even worse, with virtually no spending against a meager budgetary provision. The Aatmanirbhar Bharat Rojgar Yojna, touted as a job creation scheme, saw its budget reduced and still managed to underspend, with only INR 1,265 crore spent out of the allocated INR 1,350 crore.
The government’s failure to invest adequately in these programs underscores a broader neglect of the workforce. The National Database for Unorganised Workers, launched with much fanfare, saw only Rs 18.63 crore spent against an allocation of Rs 300 crore. The National Career Services initiative, intended to connect job seekers with opportunities, has also faltered, with expenditure far below the allocated budget. The impact of these failures is evident. According to the Centre for Monitoring Indian Economy, the unemployment rate stood at 7.6% in March, a stark indicator of the challenges facing the country. The Modi government’s inability to develop a coherent policy across manufacturing, agriculture, and services sectors has left small and medium-sized enterprises, crucial for job creation, struggling without support. Investments in healthcare and education have declined, and labour law reforms have eroded job security. In a decade marked by near jobless growth, the Labour Force Participation Rate has fallen to alarming levels. Without urgent action, the country may miss out on the potential of its young workforce, with long-term consequences for its economic future.
Related Posts:
