As Modi – government completes four years of its term in this month, it is time to take stock of its performance particularly, on the jobs front which has been at the centre-stage of criticism by opposition parties all along and will be a major plank of campaigning in the run up to the next general elections in 2019.
During his speeches in 2014, prime minister, Modi had promised job generation by a mammoth 20 million every year. The electorates especially, the unemployed youth were overwhelmed and accordingly gave him an absolute majority to run the country. Now, when we look back, there is a perception that he has not lived up to this promise; critics go that far to say that the actual job creation is a few hundred thousand [according to Congress President, Rahul Gandhi during the last 4 years, jobs have been created @ 450 per day only which works out to a total of mere 650,000].
When, protagonists of alleged dismal job scenario count the number of persons employed, not only do they indulge in suppression of numbers to a point of even lying but are also obsessed with jobs created only in the so called organized/formal sector [a generic term for all registered companies] ignoring the vast swathe of informal sector besides agriculture. First, let us consider the ‘suppression’ part.
As per the EPFO [Employee Provident Fund Organization] data – a fairly good proxy for employment in the formal sector, during the last two years, the addition of jobs was 11.5 million [4.5 million in 2016-17 and 7 million in 2017-18]. This is in sync with the government undertaking massive investment in infrastructure viz. highways, roads, rails, expressways etc and galvanizing private sector to invest by improving the ease of doing business.
Given the spectacular progress in the infrastructure [the pace of building rails/roads under Modi – dispensation is almost double than under erstwhile UPA regime], job creation in years ahead will be much faster due to the multiplier effect. But, these substantial positives leave the critics unmoved with persons like Rahul Gandhi coming up with fabricated numbers @ 450 per day which translates to a mere 325,000 over 2 years or 1/36th of actual job creation.
The blatant lie on job data apart, the focus of critics on the formal sector alone is flawed. The jobs in this sector are 50 million or just about 10% of the total workforce of 500 million. Therefore, to expect that 80 million jobs during the last 4 years should have been created in the organized sector only – as per Modi’s promise – is patently absurd. On the other hand, it makes eminent sense to look at the total jobs created – both in the formal and informal sector.
A look at the Pradhan Mantri MUDRA [Micro Units Development Refinance Agency] Yojna – launched in 2015 – would show that the current dispensation has already achieved this goal. Under the scheme, loans are provided to persons in small occupations such as vendors [including the much publicized ‘pakoda’ seller whom Modi referred while giving his assessment on the job scenario in a TV interview], small shop-keepers, beauty parlors & boutiques, mechanics, electricians, plumbers etc under three broad categories viz., Shishu – up to Rs 50,000/-; Kishore – Rs 500,000/- and Tarun – Rs 1000,000/- without insisting on any guarantee [or mortgage].
So far, a record 100 million persons have taken loans aggregating to Rs 450,000 crores. Of these, 30 million are borrowers who have set up a new business. Assuming that such a person employs one person to assist him/her in running the profession, this would mean creation of jobs for 60 million. The remaining 70 million who have taken loans for supporting/expanding existing business are also expected to create jobs. Even if one third of them provide job to one person each to support their augmented business, this would yield another 20 million taking the total to 80 million.
While, the above numbers are plausible, still in a bid to lend legitimacy, the government has rightly initiated a detailed exercise to quantify the precise impact of MUDRA in generating jobs. The study is expected to be completed by the end of current year.
However, glued to an age-old mindset that jobs can only be provided in the organized sector; that an opportunity to work coming without a good salary and associated allowances/perks is no job at all, critics are just not willing to accept the jobs generated vide the MUDRA route as an addition to the employment. For them, as a senior Congress leader and former finance minister under UPA P Chidambaram, put it ‘a vendor selling pakora is tantamount to begging’.
Extending this logic to other professions such as a plumber, electrician, cobbler, mechanic etc will have dangerous connotations. This will inculcate in the minds of youth a sense of cynicism towards these professions. They may not be willing take up and those who have already taken a plunge will think of exiting in the pious hope that they would get glamorous so called white collar jobs.
One shudders to fathom the consequences that such a mindset would entail. It would lead to an ever expanding pool of unemployed youth desperately waiting for cozy jobs to come their way but in reality just don’t exist. To argue that the organized sector or the state would provide jobs on the required scale sounds like living in fools’ paradise as latter is in the business of governance [law and order, land related issues, delivery of essential services, external relations etc] and the former offers limited scope.
With such a mindset, the so called ‘demographic dividend’ [a euphoric term for nearly 2/3rd of population falling in 18-35 age group] would have turned in to ‘demographic disaster’ as the unemployed youth could slip in to unlawful and anti-social activities, posing a serious threat to social order and national security.
The public should not allow itself to be carried away by false and fabricated propaganda; it should give Modi yet another mandate in 2019 for another term so that the tempo of efforts on all fronts having a bearing on employment and growth is maintained.