When government authorities in the southern Indian state of Tamil Nadu advertised various sanitation jobs, they were not expecting highly qualified graduates to apply. They were surprised when 150 engineers and Masters in business administration graduates responded to the announcement.
This recent episode underscores India’s grim picture of unemployment as the jobless rate threatens to jeopardise Prime Minister Narendra Modi’s dream of a second term when he seeks re-election in mid-2019.
According to a recent official survey – originally withheld by the government before eventually being leaked to media – India’s unemployment rate reached a 45-year high in 2017-18. The suppressed numbers were first published by the respected Indian daily The Business Standard, which pulled the statistics from the government agency National Sample Survey Office (NSSO).
This is a massive blow to the Modi administration, following the ruling party’s sweep of the polls in 2014 through promises of generating 20 million jobs annually. The leaked data also indicates that urban employment is higher than in rural areas – which could prove costly for the Modi government. The supposed 6.1% jobless rate has stirred the parliamentary hornet’s nest, locking the government and critics in intense political mudslinging. This means close to 30 million employable Indians among the 500 million-strong workforce are without a job. This includes 10 to 12 million young people who are entering the workforce every year.
The last time unemployment reached a rate above 6% was 1972-73 when India was only just limping back from a war with Pakistan, coupled with widespread shocks in the oil market.
The government – which so far has refused to hold a parliamentary debate on the matter despite continued demands from the opposition – neither confirmed nor denied the veracity of the numbers but insisted it is only a leaked figure. Lawmakers from both sides of the debate were engaged in bitter tirade in which party leaders were compared to dictators Hitler and Mussolini. Analysts have urged the government to embrace the report offering a plausible explanation and solution rather than denying the existence of a crisis and eventually accentuating it. The unemployment rate has continued to steadily rising since the previous low of 2.2% in 2011-2012.
The latest NSSO report was originally scheduled to be released in December last year but the federal administration has chosen not to. Traditionally, unemployment figures have always been a delicate matter, with previous governments having also been apprehensive to publish exact numbers. Two key members of a statutory body, which oversees the jobs data survey, have stepped down in protest of the government’s decision to not divulge the numbers. Rahul Gandhi, Modi’s political opponent and leader of the Indian National Congress, said the jobs report is “a national disaster”.
Critics pin two key events – the November 2016 demonetisation when 86% of high-value currency notes were abruptly sucked out from the system and the poorly implemented Goods and Services Tax (GST) in July 2017 – as causes of the jobs crisis. Prolonged farm distress and sluggish rural wage growth thought the country have contributed to these dismal figures.
The leaked jobless figure only reaffirms the other signs which have indicated that silent unemployment distress is ongoing in the country. According to a report released by the All India Manufacturers’ Organisation in December 2018, 3.5 million jobs have been lost since 2016.
Under Modi’s ambitious and flagship ‘Make in India’ initiative – a string of government policies were developed with the aim of converting the country into a production and manufacturing hub, however they failed to be put into action, having originally promised to create as many as 10 million jobs every year. Still, this scheme is also flawed, as the latest data tabled in the upper house reveals the government managed to generate just 2.75 million jobs in the last four and a half years.
Another study released by the Mumbai-based private research firm Center for Monitoring Indian Economy suggests that 11 million jobs were lost in 2018. Indian railways, one of the world’s largest employers, advertised around 90,000 jobs in 2018, for which they received more than 23 million applications, highlighting the nation’s hunger for jobs.
Creating jobs was the foundation of Modi’s 2014 election platform, as roughly two-thirds of India’s 1.3 billion population is under the age of 35. Failing to uphold this promise could mean disastrous consequences for Modi as the next parliamentary elections are only months away. Jobs generation is bound to be the vital campaign element which will hold the key to upcoming polling.