Has the Modi Government Really Been Successful in Creating Jobs?

While the labour ministry thinks the government has a successful job creation record, a recent report has shed light on growing joblessness and the shift towards informal and low-paid employment avenues.

New Delhi: The labour and employment minister Bandaru Dattatreya on Monday, May 29, stressed on the successful employment creation under the NDA government just days after Centre for Equity Studies in its India Exclusion Report 2016 claimed that growth is actually not resulting in formal employment and that large parts of the deprived and marginalised sections are the ones suffering the most.

Dattatreya, who released a book on the achievements and initiatives of the Ministry of Labour and Employment during the last three years, announced various programmes for job creation. He said over 3.87 crore candidates and 14.8 lakh establishments had registered on the National Career Service (NCS) portal which has mobilised over six lakh vacancies. He also cited that around 540 job fair had been organised in 2016-17.

Apart from this, he said, the Pradhan Mantri Rojgar Protsahan Yojana had been announced to incentivise employers for new employment. “Government will be paying the 8.33% Employees Pension Scheme contribution for these new employment for the period of three years. For the textile (apparel and made-up) sector, government will also pay the 3.67% employees provident fund contribution of employers for these new employees. Till now, benefits have been transferred to 1,954 establishments covering 75,848 beneficiaries under the scheme with an expenditure of Rs 6 crores,” he elaborated.

The secretary in the ministry, M. Sathiyavathy, spoke about how the government is creating an environment to facilitate employment with quality and fair wages. For this, she said, a number of initiatives and programmes had been undertaken.

However, the recent India Exclusion Report 2016 has highlighted the growing joblessness and the shift towards informal and low-paid employment avenues.

Widening gap between rich and poor

It had noted that since 2000, there had been a 12-fold increase in the wealth of the richest 10% people while the income of the poorest 10% had increased by just three times. As for overall job creation, it had observed that only 1.35 lakh new jobs had been created under the Modi regime as against the addition of 12 million people to the workforce.

More worryingly, the report noted how there has been a higher migration with 35-40 million labourers moving out in search of employment opportunities, often taking their families with them and leaving behind the elder parents to fend for themselves. In fact, the report highlighted the plight of India’s 103 million elderly who were outside any social security scheme and of the 40%  women with disabilities in rural India who were without jobs.

In the introduction to the report, the organisation’s director and renowned social activist Harsh Mander had written how jobless growth was impacting the social and economically deprived the most. “These are the historically oppressed groups of women, Dalits, adivasis, Muslims, persons with disabilities and casual informal workers and the poor…,” he wrote.

Growth not reflecting in job creation

Talking to The Wire about why growth, as claimed by successive governments, was not reflecting in the employment generation numbers, he said: “The promise that growth would yield jobs and therefore would benefit everybody was a central promise. But right from 2004 we have seen the phenomenon of jobless growth. Even if growth is there, fewer jobs accrue due to it and even these jobs are at the lowest level of unprotected poorly paid work. Normal employment has actually continuously fallen right through the economic liberalisation. But now it is reaching a crisis point.”

Explaining the phenomenon further, he said: “Actually the growth is related to finance and capital and not to manufacturing. Moreover, a lot of manufacturing is also getting outsourced to smaller units so that the companies are not responsible for the workers security and other related issues. A lot of services are also getting converted into contractual work.” And in all these services and outsourced jobs, people are getting paid less.

Decent work opportunity being destroyed

Vader further said that “when we are seeing the net growth figure, they hide the fact that there is a destruction of ‘decent work opportunity’ and its replacement with uncommon work. A person is never fully unemployed because they have to provide for their families and themselves but they are increasingly being pushed into these self-employment models, which in a sense also lead to varying levels of exploitation.”

Demonetisation also to blame

Demonetisation, the social activist said, broke down jobs and rendered a large number of people unemployed. Some had to consequently move to doing lowly-paid irregular work. On whether government policies relating to prohibition and even meat trade have had an adverse impact on jobs, Mander said: “I haven’t thought about prohibition in that sense. Yes, the liquor industry I would say so, but there the social cost-benefit ratios are to be looked at. Similarly, the policies related to the meat industry have impacted the sector.”

Possible solutions

On what needs to be done to mend the situation, he said: “I do believe that you have to recognise and acknowledge that economic growth does not necessarily lead to the creation of jobs. For job creation you need to have not a top-down or a trickle-down approach but a bottom-up kind of growth model which concentrates on protecting your own self-employment avenues and manufacturing and increasing agricultural activity.”

Mander said the need of the hour was to promote policies like National Rural Employment Guarantee Scheme which not only provided people with more jobs but also showed that if there is more money in the hands of the poor, then it would result in growth in the local market.

“Infrastructure and housing construction are also important as they result in the creation of a large number of jobs. But they also require public investment. So the government should focus on spending on social housing and education expansion. These have a great potential for increasing employment generation.”

Mander said he had recently written in an article that three years into the Modi government, “employment creation has not proved to be all it was cut out to be” as there are almost no jobs available in India’s high-growth economy.