Skill, Productivity, and Growth Interlinked. Key to Jobs

INDIA AT 75 IS THE FIFTH LARGEST economy, and yet exhibits none of the characteristics of a developing country.

We suffer high (about 40 million) unemployment, and even more acute ‘underemployment’. A Crux study of the last two economic boom cycles confirms a slowing pace of job creation. The correlation between corporate revenue and jobs is weakening, down to 0.15 per cent from 0.4 per cent for every one per cent growth in topline and is at a historic low.

Jobs are key to inclusion and upward mobility.

Structural, Weakening Shift In Demography. Transition Uneven India may be at the end of the demographic ‘dividend’ curve. The working-age population at 63 per cent is the envy of the world but in a jobless growth ecosystem it is turning out to be a misfortune. At 23 one is old in Uttar Pradesh, but at 34, one is young in Kerala. Exploiting the demography will need a scalpel.

We have used the hammer. The economy ‘creates’ merely 60 per cent of the jobs needed. Labour force participation at 45 per cent is the lowest amongst economies of our nature. The female workforce participation is even worse; and retreating. It’s even lower than that of Pakistan. This must worry us. The job ecosystem has several other inimical features. About a third of all male graduates in their twenties are unemployed.

A Crux study highlights that the young and educated’ ‘wait’ 42 months for jobs compatible with their qualification. The eager ‘accept’ and get absorbed in low-productivity segments of the unorganised sector. ‘Continued’ engagement in family firms and farms is the last resort, implying under-employment; and no better.