Economic Highlights
New
Delhi, 1 April, 2024
Market Fails Jobs: ILO
CHANGE NEP, STRATEGIES
By Shivaji Sarkar
As the
country gears up for one of its most interesting elections, the economy
requires significant improvement to address the challenges, as highlighted by
the International Labour Organisation (ILO) and official indicators, which
reveal a deteriorating situation concerning jobs and official stats of a 31
percent decline in foreign direct investments (FDI).
Ambitious
government projections of $3 to 5 trillion economy and other figures apparently
are not in sync. A rise in the stock market is not supported by strong
indicators else FDI cannot fall so drastically at a critical political
juncture.
The country
is receiving short-term fly-by-night foreign portfolio investments at stock
markets. The FDI indicates the investor confidence in the system. It is
promised but is not actually flowing in. There are UNCTAD studies that show
interest in India, but the actual flow has usually been weak. India’s
inequality is attracting attention of world powers.
The
Inequality Report 2022 brought out by Institute of Competitiveness on the basis
of Periodic Labour Force Survey (PLFS) 2019-20 finds that monthly salary of Rs
25,000 puts a person among the top wages earned. It is interpreted as a
challenge to securing development with dignity to all and actual growth.
The ILO
report is vocal about the employment challenge that cannot be left to the
markets alone. Production in manufacturing is becoming capital intensive. Without
high manufacturing growth, employment generation might continue to disappoint.
Is it for that reason the government investing in the construction and real
estate? It is internationally accepted that about two-thirds of infra
investments are frittered away in various kinds of cuts. Be it Southeast Asia
or any other region, infra investments have resulted in severe meltdowns.
India’s
youth employment profile suggests country passing through a difficult phase.
Share of youth who are not in employment, education or training has averaged
29.2 percent between 2010 and 2019, the highest in the subcontinent. There is
high proportion of unemployed educated youth even as industry complains of a
shortage of skilled jobs.
The
report emphasises on the broken link between education and employment. “A large
proportion of highly educated young men and women, including the technically
educated, are overqualified for the job they have”. It is a reflection on the
education system and the New Education Policy (NEP) that stress on an extended
four-year-undergraduate degree course and high qualifications of PhD. This is a
common phenomenon across the country as youth with such unusually high
qualifications pine for blue-collar public sector jobs in the hope of job
security. About 3700 PhDs applied for the post of a peon in Uttar Pradesh
police where class 5 was the eligibility criterion.
It's an unsavoury
comment on the education system and the private sector, which have thrown even
the basic labour laws to the wind. The ILO report stresses on 1) promoting job
creation; 2) improving employment quality; 3) addressing labour market
inequalities; 4) strengthening skills and active labour market policies; and 5)
bridging the knowledge deficits on labour market patterns and youth employment.
The NEP does not answer these questions.
It flags
the challenges of addressing inequalities, improving quality of jobs and fixing
asymmetries in the labour market. A State Bank of India study on women’s
collectives brings out the gains through aspiring lakhpatididis. However,
on income, employment and human capital there is still a distance to cover.
The ILO
report calls for giving primacy to labour intensive manufacturing employment to
absorb the unskilled labour. A comparison with China’s shortfall in
infrastructure funding promises to SE Asia on Belt and Road Initiative (BRI)
may be a lesson for India, as per study of Syndey’s Lowy Institute. It is a
pointer to the huge gap in funding and long gestation period. Only 35 percent
of infra projects seen through completion. The funding is falling through by
$50 billion. The Lowy report is a caution for India for desisting from
investing in infra projects. Poor quality of constructions of bridges and other
infra, including too many roads in Maharashtra, Gujarat of Bihar are
testimonies for the failures.
Women
are often not preferred for jobs as these entail maternity and child care
benefits. About 53.3 percent of the female workforce was self employed in 2019.
It rose to 62 percent in 2022. Many of them are employed but paid low or no
wages.
The weak
consumption data in the GDP numbers indicate that over the past decade
inflation-adjusted earnings of regular salaried and self-employed persons
declined. Perhaps, it is the post-demonetisation syndrome that devastated the
small and medium entrepreneurs.
An issue
that the reports have not discussed is the marginalisation of the public sector
companies and gradual disinvestment. A fall out is testified by the electoral
bond donations. The Rs 12000 plus crore donations are grim pointers that the
private sector functions on the principles of giving donations and in return
getting back expensive projects.
These
are dependent on the government doles at the cost of PSUs. A real private
sector has not yet emerged in this country. This has been the pattern in the
licence-permit raj as well and continues in era of liberalisation. Why should a
country foster such unethical business model? Much of the failings underlined by
the ILO or PLFS are grim reminders of poor consumption and a failing business
system.
The
nation needs to ponder why it should dip into high debts which has annual
repayment of over Rs 10 lakh crore exponentially squeezing the actual budgetary
allocation to around Rs 37 lakh crore, far away of from $3 trillion target. A
policy review is called for the entire financial system, manufacturing,
employment and New Education Policy.
The
country is on experimentation spree and has yet to stabilise its policies. The high prices are obstructions. Parliament
is unnecessarily busy in making laws or redrafting the old ones. No wonder the
chief economic advisor, the highest think tank, says the government can’t solve
the problem of unemployment. Post poll
all national and regional parties and institutions must come together to
redraft the sustainable growth path and manufacturing policies, including
revival of PSUs for proper quality job creation, a strong ILO suggestion. ---INFA
(Copyright, India News & Feature Alliance)
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