With the general elections only a few months away, the opposition parties have resurrected their attack on prime minister, N Modi for failing to generate 20 million jobs every year – that he promised during his campaign for 2014 elections.
The tantalizing figure that arouses the emotions of common man in the street is being used by these parties as a potent weapon to ensure that Modi gets defeated even as they themselves have no vision – forget a comprehensive action plan – to create jobs.
The contentious issue of what this prime minister has done and whether or not he has lived up to the aspirations of the youth in providing jobs of the required scale requires an objective and dispassionate analysis. But, first a word on the promise itself.
Even as Modi stressed on creating jobs on a massive scale [as one of his major poll planks] and rightly so, the figure of 20 million found no mention – neither in the election manifesto of BJP nor in any of his election speeches. So, where did this figure?
Delivering a speech in 2013, Modi had taken potshot at the then ruling UPA – dispensation for promising to create 10 million jobs even as factories were being closed all over. It is this statement which has been obliterated by critics to lash out at Modi.
Coming to Modi’s track record, during the last 4 years, growth in GDP was fairly high 2014-15: 7.4%; 2015-16: 8.2%; 2016-17: 7.1%; 2017-18: 6.7%. During 2018-19, it is estimated to be 7.2%. With current GDP of over US$ 2.6 trillion, India is now the sixth largest and fastest growing economy in the world.
There can’t be growth without deployment of men, machines and materials. When, GDP grows at a fast pace, the use of these factors of production also increases rapidly. In the last 15 months alone, 18 million jobs were created. That apart, under the Pradhan Mantri MUDRA Yojna [under it, loans up to Rs 1000,000/- are given to persons engaged in small businesses without insisting on mortgage], at least 90 million jobs have been created since 2015.
Modi – dispensation is also laying the foundation for accelerated growth and concomitant job creation on a sustainable basis in times to come. It is doing so under a two-fold strategy.
First, it is spending more on welfare schemes aimed at providing subsidized home, education, health, food, electricity, gas connection etc to majority of the poor and ensuring that the allocated funds reach the beneficiaries in full. During the last four-and-a-half years, it has already spent a mammoth about Rs 5,80,000 crore on these schemes. This is helping improve the human development index – a pre-requisite for making our youth fit for jobs.
Second, it has undertaken massive investment in building physical infrastructure viz. roads [including rural roads], highways/expressways, shipping/ports, inland navigation/waterways, new airports, renewable energy, electrification etc. The budget allocation for infrastructure has increased leaps and bounds 2014-15: Rs 55,000 crore; 2015-16: Rs 125,000 crore; 2016-17: Rs 221,000 crore; 2017-18: Rs 494,000 crore; 2018-19: Rs 597,000 crore. This works out to a total of Rs 1492,000 crore.
Likewise, the government has undertaken massive investment in railways for adding new lines, broadening existing lines, electrification, modernization, signaling/communications, bridges/underpasses, safety, station development etc. This too has gone up leaps and bounds 2014-15: Rs 59,000 crore; 2015-16: Rs 93,000 crore; 2016-17: Rs 109,000 crore; 2017-18: Rs 120,000 crore; 2018-19: Rs 146,000 crore. This works out to cumulative investment of Rs 527,000 crore.
By facilitating better and seamless connectivity with sources of raw materials/ports and major markets [including export markets], this helps existing industries and businesses grow, enhance operational efficiency and reduce transaction cost. Besides, it incentivizes setting up of new industries and service establishments in the vicinity/neighborhood of the highways/expressways/rails.
Apart from large industries, the potential for establishment of micro, small and medium enterprises [MSMEs] distributed over a vast area is huge. In the service sector, hotels/restaurants, entertainment, tourism etc are expected to get a big boost. This in turn, will lead to an unprecedented surge in employment.
Agriculture employs about 50% of the workforce but contributes a mere 17-18% of the GDP. The imbalance is primarily because of low price received by farmers for their produce. A big bottleneck here is poor connectivity with the markets. A vast network of rural roads connected to highways/expressways holds promise for alleviating this bottleneck enabling higher price. This would increase farmers’ income and employment thereby moderating migration to cities.
Building the capability of our youth and expanding/strengthening the infrastructure are works-in-progress. By nature, their full potential in terms of pick up in growth and employment will be realized after a time lag of minimum five years. Clearly, the investment undertaken by Modi – government – on a scale never seen before – will pay-off from 2019 onward more so during 2022-24.
The credit for surge during that period will necessarily have to go to Modi irrespective of who steps in to the hot seat. Here, it is worth recalling that infrastructure had got a boost even during 1999-2004 under the NDA regime [then led by Vajpayee]. The fruits of that investment were delivered mostly during 2004-2009.
Unfortunately, the credit for that was appropriated by UPA – dispensation which took charge during the period. Hopefully, history won’t repeat.