How to avert a demographic disaster

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India’s joblessness rate hit a four-month high of 7.9 per cent in December 2021, with urban unemployment rising to 9.3 per cent — a reflection of how Indians have been hit hard by a dismal economy and the pandemic. It gets worse — in poll-bound Uttar Pradesh, the labour force has risen from 149.5 million to 170.7 million in the past five years, while the percentage of those employed (as a share of the working-age population) has actually fallen, from 38.5 per cent to 32.8 per cent during the same period, according to CMIE data.

Such policy disappointment has real-world implications, particularly for the youth, for whom the unemployment rate has risen steeply in the last few years, from about 15.66 per cent in 2016-17 to 28.26 per cent in 2020-21 (it was 32.03 per cent in August 2021). Even getting a degree is no guarantee for a job — 9 million of 55 million graduate degree holders were unemployed in 2019. We seem to be wasting our nation’s demographic potential — our youth stay unemployed for longer, desperately awaiting a chance to crack a government job. And if they don’t, then the only option is to get an informal job as a labourer.

Our policymakers may have mastered the art of populism but have they put up their hands on job creation? The challenge keeps getting tougher — India needs to create 90 million non-farm jobs between 2023 and 2030, to ensure our demographic surplus is absorbed. Instead, we have tinkered with short-term fixes, hoping the newest trends will solve this problem. Only a decade ago, policymakers expected India to be the world’s back office, with our people being gainfully employed. Now, we hope that the gig economy, fostered by new-age start-ups, can achieve this. A reality check — as of July 2021, there were more than 53,000 recognised start-ups in India, which had created about 5.7 lakh jobs (not counting the jobs they may have destroyed by optimising value-chains). Meanwhile, the old tap of public sector jobs has gone dry — there were 11.3 lakh employees in Central Public Sector Enterprises as of March 31, 2017; by 2019, this had dipped down to 10.3 lakh.

India’s poor have reacted as they always did — by continuing to till the field and working as labour at construction sites. For some, it is a continuing set of disappointments with the Indian state — many have simply stopped searching for jobs; the labour force participation rate has dropped to 40-42 per cent from 47.26 per cent in August 2016 — 60 per cent of our workforce is simply not looking for work. However, in recent years, the bill increasingly comes to the state — demand for state-assured labour jobs under the National Employment Guarantee Scheme has gone up, with 85.6 million individuals participating between April and October 2021, significantly higher than between 2017 and 2019. And so India muddles along, hoping this time that manufacturing jobs will shift from China.

But perhaps a different state could emerge, one that fostered the creation of public assets and invested in human capital. And as we simplified regulations and incentivised production, jobs would be created. An initial step would be to rejuvenate the state by dramatically expanding basic public services. As of 2019, before the pandemic, there were about 2,00,000 million health worker vacancies, 1 million teacher vacancies and 1.17 million anganwadi worker positions — totalling over 2.5 million vacancies. Additionally, there is a clear need to expand capacity in healthcare by 2,90,000-4,20,000 health workers. It’s not enough to simply announce a new AIIMS every campaigning season. We also have a moral duty to regularise contractual and seasonal workers in these sectors. Doing this would create over 5.2 million jobs.

At the same time, we need to help up-skill the existing labour force, particularly in urban India. A national urban employment guarantee scheme, with a focus on creating public assets, would help improve skill sets, provide certification and give income support. Such a scheme could cover 20 million urban casual workers for 100 days, at a wage rate of Rs 300 per day, with an overall cost of Rs 1 lakh crore annually. The state of Indian cities continues to be poor — with significant rehabilitation and expansion of public works required. Such a scheme could help.

Another way out could be to foster “green jobs” — including those traditionally under the remit of public services (water conservation, waste management). It is estimated that a municipal council-based town could create about 650 “green jobs” in such categories, while a city municipal council could lead to the creation of 1,875 jobs and a full-fledged municipal corporation could lead to 9,085 jobs. About 150-2,500 of these jobs in the latter area would be generated in the renewables sector, while an additional 300-2,000 jobs would be in waste management, 80-1,700 in urban farming and 300-2,000 jobs in waste management.

Continuing to be reactive will have significant societal consequences. In 2021, Shivpuri, in Madhya Pradesh, was witness to scenes of pandemonium, as about 8,000 citizens waited in line for a chance to become one of the 20 peons being recruited for the district court. In Gwalior, 15 openings for various junior roles (from a driver to a watchman) saw over 11,000 unemployed young men flock to collect forms. Often, the same person (educated to an MBA or PhD) would be applying for the role of a peon, while preparing for a judge’s exam.

India’s cities can be magnets for job creation, if the right policies are implemented. We need a national conversation on urban unemployment, with roundtable meetings for government officials, MPs and MLAs to hear the needs of youth, along with more detailed thoughts on the development and implementation of this strategy. We need to face the challenge of job creation and up-skilling of youth for the labour market to ensure that India’s demographic dividend does not become a demographic disaster. Mere rhetoric will no longer be enough.

(The writer is a BJP Lok Sabha MP)

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