Going Pear Shaped

On this blog I have discussed India's rise and attempts to get invited permanently to the top table ....

Indians Need Jobs

.... and the reasons for its failures to do so. So I am not going to reprise these attempts and the reasons why they have not really succeeded, but instead look at a structural problem within the Indian economy, that could easily destabilise the whole project.

The problem is the Indian unemployment rates. A problem that has grown a great deal since the 2005 date, when it was first identified as a growing concern, and that has since led to many young males having a confidence crisis, as lack of a "pukki naukri" (permanent job) impacts both their familial responsibilities and their self respect. 

A month after the first Indian Covid lockdown, 121 million Indians were out of work, with the majority being under the age of 30 - 35. Since then, the civil service government jobs have become difficult to find as the BJP have overloaded the state with such numbers of 'non jobs,' that even they can't create more such 'non jobs' at either the local or national state levels. In fact new employment in the government sectors fell by over 60 per cent by June 2020, compared with the previous year.

But although tens of millions of jobs, mainly in the informal and rural economies (The bulk of India's 400-odd million jobs are in the informal economy), have been reclaimed, the educated salaried jobs have not recovered, even though many are actually still low paid posts, with 45% of all salaried workers earning less than 9,750 rupees ($130; £96) a month. That's less than the 375 rupees a day that was once proposed to be India's minimum wage (the government dropped that idea as unaffordable and impractical). In all, 19 million salaried formal economy jobs have been lost to the economy after the lockdowns.

Thousands Apply For State Jobs

An example of the current employment crisis is that more than 10,000 jobless young people turned up for interviews, for just 15 low-skilled government drivers jobs in the central state of Madhya Pradesh - most were over qualified, even law graduates, post-graduates, engineers, and MBA's. The Indian unemployment rate was nearly 8% in January 2022, which was far greater than local economies in its region e.g. Emerging economies like Bangladesh (5.3%), Mexico (4.7%) and Vietnam (2.3%), all had lower unemployment rates.

The men now describe themselves as being in "Berozgaari" (unemployment), living as a "nowhere generation," doing 'timepass' (An Indian English - Hinglish - word which means spending time without a purpose in life). As for Indian women, well they hardly count, and recently the proportion of Indian women, aged 15 and older in the workforce, has fallen from an already low level, to being among the lowest in the world.

In truth, official Indian unemployment figures refer in the main the 'educated' young people looking for jobs in the formal economy, while for the vast majority of Indians (who are not highly educated, being poor, unskilled or semi-skilled people), employment is in the informal economy which actually employs 90% of the workforce, and generates half the economic output. 

These forgotten people would starve if not employed, and so simply never appear on India's unemployed figures. So three-quarters of India's workforce are self employed in casual employment, with no social security benefits, and only a little over 2 per cent of the workforce having secure formal jobs with access to full social security (health benefits, maternity leave, pensions and written contracts etc). In fact only 9 per cent of those employed even have formal jobs with access to at least one of these social security sources.

The Indian state has declared its intentions (in the 2022 budget announcement), to create six million jobs over the next five years, but this is at best ambitious, and at worst highly unlikely to occur. India has simply never created the manufacturing jobs, that almost all the major economies still have or once had while moving to the post industrial state. In India a comparatively small, but highly paid in local terms, Service Sector and IT Sector have driven India's economic growth, but left the vast majority of the workforce in either the informal or private administrative, and government employed economic sectors.

India faces a number of challenges over the coming decades if it wants to maintain the gains of the last three decades. Its physical infrastructure such as power, roads, rail and ports are all in need of major rebuilds if the economy is not to seize up. But just as importantly it needs to reform is social society structures to allow the vast majority of its workforce to move from the informal, insecure economy, and into some sort of social employment security. 

This would involve some painful changes from the Hindu nationalist BJP, starting with ensuring fair and equitable treatment for all religious minorities (including the Muslims), and trying to find more suitable jobs for higher eduction leavers. But perhaps most pressing of all, creating semi-skilled jobs in factories and manufacturing, for the poor, unskilled, or semi-skilled, including women. 

An economy entirely based upon agriculture, and just one or two high tech sectors. is never going to be able to hold up employment levels in the country. At some point in the next decade or so, those natural advantages that India has had: 

1. Some level of English amongst many middle class people, and 
2. Links via the diaspora with the UK, Canada, USA and Australia.

.... will be lost to other areas such as Mexico and Bangladesh, who both share those attributes with the USA and UK etc respectively.