Satyajit Ray’s famous Bengali film, Seemabaddha (1971), opens with the dialogue that translates to, “One of the major problems in Bengal is unemployment.”
The same is true for India now. According to a report published by the think-tank, the Centre for Monitoring Indian Economy (CMIE) that tracks business and economic data, currently, around 31 million unemployed Indians are seeking jobs.
Where are the jobs?
According to a report published in The Hindu in 2017, the Chief Economic Adviser, Arvind Subramanium had pointed to the need to achieve an economic growth of 8% to 10% to solve the problem of jobless growth in India. He had raised concern over the under performance of the information technology (IT), construction, and agriculture sectors, which had traditionally served as prominent job generating sectors for the Indian economy. According to Labour Bureau figures, India added around 1.35 lakh jobs in eight labour-intensive sectors in 2015 as compared to the 9.3 lakh jobs that were created in 2011.
Higher economic growth alone will not solve this problem. Jobs can be created when growth comes from the transition of labour from informal sectors like agriculture to formal sectors like manufacturing and service. Such extensive growth may run the risk of stagnation once supply from the informal labour market gets exhausted. On the other hand, growth can come about without any substantial job creation in the formal sectors of the economy but through improvements in productivity. The growth record of several developed economies even after modernisation of their labour force explains such intensive growth.
India’s unemployment problem
Prime Minister Narendra Modi has pitched for the greater use of technology. Yet, there’s stagnation in India’s IT sector. The country’s unemployment saga lies beyond the formal job market. Around 77% families have no regular wage earner and more than 67% have income less than 10,000 a month.
Denne historien er fra November 1 - 15, 2018-utgaven av BUSINESS ECONOMICS.
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