The Jobs Crisis in India: An account of a real problem that some fail to understand, and some pretend not to

The actual state of India’s employment problem is a puzzle even for the best economists in the world. Reason: There isn’t enough quality data to arrive at an informed opinion. Hence, most of the assessments are based on vague assumptions, extrapolations of small samples.

Whatever numbers are offered by the government’s surveyors and statisticians on job data, it comes with a painful lag and is often not usable. But the state of jobs is too important a metric to ignore by any serious observer of Indian economy.

In this backdrop, R Jagannathan’s book, The Jobs Crisis in India, is a must-read for any serious student of economics. It offers a 360 degree view of India’s job crisis. The language used is simple and devoid of jargon, which makes an otherwise dry subject an interesting read even for a beginner.

As the title suggests, Jagannathan admits the existence of a jobs crisis in the country, which needs to be seen in the backdrop of constant denials and playing down of this critical issue by many in the NDA-government and by  right-leaning economists.

The chapters are designed to debate some of the long-known issues concerning India’s job market, most importantly the absence of quality data available for a fair assessment of the situation, the problem with the very definition of ‘jobs’ in the Indian context (Does selling food on the roadside fall within the definition of a job?), the very pertinent question of whether it is a ‘wage issue’ or ‘job issue’ given that most people have some form of livelihood but not enough income and the age-old debate of whether automation and technology is a villain or friend in the India-specific employment/unemployment debate.

Jagannathan puts the unemployment rate in the country somewhere between 2.2 percent and 5.6 percent which, however, is too wide and not really a useful range.

To express his overall assessment of India’s job situation, Jagannathan tells the reader an interesting cricket analogy. “We have to score 300-odd runs on the final day in deteriorating pitch conditions and after losing a few quick wickets the day before, but we still have enough top-quality batsmen to see us through”.

This analogy, however, is quickly followed by a warning, “We have time on our side but not an eternity.”

There are many familiar reasons the author lists throughout the book to explain why enough high-paying jobs aren’t being generated in India to accommodate millions of youngsters entering the job market every month. These include lack of demand-driven skill training, very little use of technology in small and medium enterprises and flawed labour reforms.

Jagannathan hits the bull’s eye when he says the job problem runs deep mainly because “larger sectors are simply overmanned and underproductive” making the scope for jobs being shed faster than adding of new jobs in sunrise industries like digital banking and e-commerce.

One recurring issue that comes up in the book is the absence of sufficient data. “Without authentic data, can the government decide how and where to invest in skills, what kind of jobs are disappearing, and what kinds are set to appear? If the problem in India is not jobs per se, but the quality of jobs and the incomes they yield, how can sensible policies be developed with dubious data?”

Jaggannathan asks a pertinent question: How can this problem can be tackled?

The author makes a case for public and private partnership to make more frequent, quality data available. This is an important point which should be discussed at the government-level and the government’s think-tanks can closely examine this possibility to address the issue of missing numbers.

Having stated the problem, Jaggannathan makes certain recommendations to resolve India’s jobs crisis, the major thrust of which seems to be empowering small companies with better technology so that those firms can employ several more people than what they manage today. Of course, this can’t be done without conducive labour laws and a operational framework that encourages small units to be more aggressive participants in the manufacturing play.

There are mentions of higher productivity through technology as a remedy to job losses on account of automation at the top of the manufacturing food chain. The book picks certain sectors such as apparel, logistics, tourism, construction, real estate, education and healthcare as high employment potential areas.

The message of the book, written by one of India’s most senior business journalists, seems to be that India needs to first acknowledge the problem of unemployment with full seriousness, avoiding pretensions and then prepare a solid roadmap for a course correction, before precious time runs out.

The book is an account of a real problem in India that some fail to understand, and some pretend not to.

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