In an exhaustive interview given to a news channel on the eve of the New Year 2018, prime minister, Modi cryptically observed “won’t you consider a vendor selling ‘pakodas’ [a most preferred snack consumed all over India] and earning Rs 200 per day as a job”. The observation has added fuel to a raging debate over the employment generation record of the NDA government.
The grand old national party, Congress is not tired of lashing out at the government for its alleged failure to redeem its election promise of generating 20 million jobs every year. Reacting to Modi’s observation, P Chidambaram, a senior Congress leader and former finance minister under UPA has opined “if selling pakoda is tantamount to creating a job then, begging should also be treated as job”.
The entire approach of the critics in viewing and interpreting Modi’s promise vis-à-vis the actual job creation on ground zero is seriously flawed. Long acclimatized to a mindset that jobs can only be provided by the organized sector [or so called ‘formal’ economy] viz. in a large factory or service establishment, they are quick to point out that the government is nowhere near the goal.
According to the Labor Bureau data, the work force in eight sectors [textile, metals, gems & jewellery, automobiles, transport, IT BPO, leather, handlooms and power loom sector] is just about 30 million. Including other sectors, the force is estimated to be 50 million in total employment of about 500 million which includes employment in agriculture and the informal sector.
To expect an annual addition of 20 million to existing jobs in formal sector is utopian. How could one achieve in a mere about two years something that was achieved over several decades? Clearly, the prime minister did not mean this when he made the promise. That has to be seen in relation to total workforce of 500 million and works out to annual growth of 4% which makes perfect sense.
To assess whether the government has redeemed the promise, we should look at job creation in totality i.e. in the formal and informal sector put together. In this regard, Modi has adopted a strategy that focuses on enabling the youth stand up on his own feet implying self-employment which would also create jobs for others.
There are hundreds of occupations such as vendors [including ‘pakoda’ seller], small shop-keepers, beauty parlors & boutiques, mechanics, electricians, plumbers etc [to name a few]. Under the established socio-economic order – nurtured for several decades under the subsisting political dispensation – these were never considered as respectable professions. These were mere appendages to the so-called formal occupations. They never got what they deserved.
Modi – himself coming from a poor/backward background – has always believed in the inherent potential/capability of every individual – irrespective of his background, social strata he belongs to and his education – and would like to give him full opportunity to exploit it by pursuing a profession of his choice. With this conviction, his government launched the Pradhan Mantri MUDRA [Micro Units Development and Refinance Agency] Yojna in 2015.
Under the scheme, loans are provided to persons in small occupations [such as those mentioned above] 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 400,000 crores. Of these, 30 million are new borrowers.
Assuming that a borrower employs one person [at the bare minimum] to assist him/her in running the profession, this would mean creation of jobs for 60 million if only new borrowers are considered [loans taken by existing borrowers also have some job creating effect; if this is also taken in to account the impact would be even more]. Distributed over three years, the annual job creation is 20 million.
Add to the above addition of jobs in the formal sector 10 million [4.5 million during 2016-17 and 5.5 million during 2017-18] as per the EPFO [Employee Provident Fund Organization] data – as cited by Modi in an interview given to a news channel on the new year eve. The total job generation would be 25 million each year.
Clearly, contrary to the propaganda unleashed by vested interest, Modi has not disappointed the youth even on the job front which was the most challenging of all the promises made. Embarrassed at this, his die hard critics have now started contesting the very idea of self-employment. Chidambaram’s jibe on Modi’s ‘pakoda’ comment needs to be viewed from this prism.
The comparison of a vendor selling pakoda with a beggar suffers from a serious flaw. While, the former takes the initiative and makes necessary efforts [hiring space, arranging basic raw materials viz. gram flour, salt, potato, onion or other vegetable, oil, spice and fuel etc] standing on his feet throughout the day for preparing the snack, latter does nothing for earning a living. A pakoda walla does his work with lot of self-esteem whereas a beggar is far from it.
Giving this absurd logic even the slightest of currency can create a dangerous situation whereby by other professions such as a plumber, electrician, cobbler, mechanic etc [hitherto considered as appendage to mainstream occupations such as engineers, doctors, CAs etc] will be looked at with contempt. If, the youth is unwilling to join these, the unemployment scenario will turn even grimmer.
The stance taken by Congress should be dismissed with the contempt it deserves. Meanwhile, Modi – government deserves kudos for not only helping people to become self-employed – vide schemes like MUDRA – but also creating jobs in the formal sector through massive investment in infrastructure especially in rural areas and putting India on high growth trajectory of 8% plus from 2018-19.
It is also good to see the labor ministry taking initiatives to expand its data base to capture the employment situation in all sectors to the economy so that a fair assessment can be made not leaving anything to speculation which otherwise turns in to a breeding ground for baseless and unsubstantiated allegations.