Horror Prospects of Unemployment

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(Brig (retd) GB Reddi)

India faces ‘horror prospects of unemployment’ to overcome. Whichever political leader or party claims to provide jobs for all unemployed is just fooling people – building castles for unemployed in the AIR.

Unemployment of allowance ranging from Rs.3,500 to 5,000 promised for jobless youth.

As per the ‘WorldOMeter” as on 28 May 2017, India’s population has already crossed 136 crores and racing ahead at 1.2% annual growth rate to reach 200 crores by 2050 with 5% unaccounted population taken into account.

Cowards all political leaders are to address the population growth squarely out of fear of losing minority vote banks.

The data of distribution of work force sector wise in 2017 includes: 42.74% in agriculture; 23.79% in industry; and 33.48% in services. As per data in public domain, the unemployment rate in 2017 is 3.52% down from the high of 4.12% in 2008. As per the same source, the youth unemployment rate in 2017 is 10.54%.

In contrast, the average annual rate of job growth creation at the all-India level is 3.2% in 2009-2016, what with growth rate of job seekers that averaging 2.4%.

Every year, there are around 50,00,000 graduates passing out from various institutions. Out of which 12,00,000 are engineers what with  5-6,00,000 are IT/computer engineers. That is India produces 100 times engineering graduates than UK. More degree and less jobs is a reality. When employability of technical graduates is a worrisome issue, what is the scope for employability of low quality human resources?

Next, the data of employment exchanges and total number of registered job seekers as on 2014 provides a grim picture. There are 978 Employment Exchanges wherein 482.61 lakh job seekers with 170.78 lakh women jobseekers have registered what with only 7.6 lakhs jobs notified in 2014.

What does it imply? Providing government jobs to the waiting lists of people in “Employment Exchanges” of various States and Union Territories even for graduates is a virtual impossibility what to talk about those job seekers with 10th pass certificates. Add to them, 47.5 lakhs people, on average, adding to the labor force (approx. around 4600 lakhs) as per labor bureau data. Experts are projecting 28 crores to flood the workforce by 2050.

India’s constraints are quite explicit. Land is finite; its load bearing capacity is cumulatively getting over stretched. Natural resources have depleted. Capital is scarce. Fossil fuel reserves are quite low unless new reserves are discovered in Andaman Sea territory. “Youth Bulge” is known to all.    “Robotics” is all set dramatically to change the “rules of the game of manufacturing” and making human skills even in ‘services sector’ redundant by 2030, if not earlier.

Instead of “Catching the Bull – population explosion – by its Horns”, mother of all STRATEGIC CHALLENGES, and taming or containing it, out of fear of vote bank backlash, Indian political leaders excel in making tall promises.

Economic experts educated on western models of growth and development pontificate theories that cannot be implemented in the Indian environment. Few invoke that if Japan could sustain its growth with a higher density of population with limited natural resources, India too can do it.

The real problem lies in such ‘utopian’ concepts.  Japan is Japan; China is China; and India is India. They are not comparable when considered from various variables. Japan exploited opportunities available to them in the post-World War 2 era; China raced ahead after 1984; but we lagged behind.

With job opportunities scarce, the situation could lead to massive unrest if India’s leaders don’t find a way to address it with utmost expediency. Technically qualified unemployed youth are bound to look for easy opportunities in other avenues like politics, guns, drugs, smuggling, hacking etc. Explode societal violence all around on narrow sectarian lines.

Ipso facto, liberalization of 1990s did little to boost India’s manufacturing industry. Poor infrastructure, labor laws, license Raj and uncompetitive labor costs resulted in MNCs opting for other nations. Add to it, spread of rampant corruption to all vitals of the nation. Meanwhile, global businesses and trade have become increasingly highly competitive.

Since 1990s, experts have been harping on the need for dynamic structural shifts in Indian economy from agriculture to manufacturing and services sectors. Labor unions remain stumbling blocks for efficient productivity.  And, the shifts remain a mirage.

Even today, India’s merchandise exports account for just 1.6% of the total trade. Ipso facto, domestic driven low cost manufacturing through value chain in traditional sectors like textiles to daily usage electronic items were lost to Bangladesh, China, Japan and other South Asian countries what to talk of high-tech high-cost industries for either export or domestic use.

Surely, India boasts of technical excellence electrical machinery, equipment, electronics, computers, and so on. At least, domestic industry must meet domestic demands by offering at competitive costs as against Chinese or Japanese or other South East Asian countries. The ‘silver lining’ is the pharmaceuticals sector. It has continued to boom in the wake of the reforms, even if they curbed its freedom. Of late, there is surge in ‘Steel and Iron’ sector.

“Make in India”, more precisely, “Made by India” remains mere “slogan”. Despite government easing restrictions on foreign investment in the defense, railway, civil aviation, broadcasting and pharmaceuticals sectors, hardly any significant breakthrough have been achieved.

Experts must realize and accept that dramatic shifts from agriculture to manufacturing and services sectors in short and even in midterm contexts is a virtual impossibility due to the size of lowly qualified and skilled workforce. No point in pontification from AC drawing rooms to fool people.

Since nearly two-thirds of India’s population lives in rural areas, agriculture still remains full time occupation for majority. Absorption of low skilled rural labor is only possible if development of agriculture as industry to include dairy farming, floriculture, fisheries and forestry is progressed. Furthermore, transfer of modern cultivation and value addition technologies to include green houses, drip and sprinkler irrigation remains consigned to paper status.  Ironic, but true, that all of them continue to remain stagnant so much so that import of fruits, vegetable oils etc continue as hither to fore including Macdonald’s and KFCs Chicken.

One cannot help but highlighting the success story of Almeria in Spain. 64,000 acres of plastic greenhouse-like structures is at the heart of the country’s agriculture industry and exports almost three-quarters of its crops to other parts of Europe. For example, the cost to develop one acre ‘green house’ depends on the product to be produced – High, Medium and Low costs.  Add to it, investment for planting material/seeds, fertilizer, pesticides, cultivation technical expertise, labor and other costs. Even a farmer owning 20-acre land may hesitate to venture into such a heavy capital intensive venture.

Currently, State governments are giving nearly 50-80% subsidy. Yet very few farmers are availing the subsidy facility due to unaffordable capital investments, red tape and lack of technical expertise resulting in development in penny pockets isolated from each other.

Instead what is needed is to replicate Spain’s “Almeria” model under “Special Agri Zone (SAZ)” like Special Export Zones (SEZ) and industrial parks and offering attractive financial subsidies and total technical expertise to interested parties. To start with, “Public-Private-Partnership (PPP)” model in collaboration with either Israel or Spain or Netherland based on “Transfer-of-Technology (TOT)” model may be considered to develop SAZs in various states.

“Tourism” was identified in early 1990s as offering tremendous prospect particularly as a nation with many layers civilization culture over 5000-7000 years vintage. Due to variety of reasons – terrorism, epidemics etc., the fillip needed remains stunted.

To sum up, the “Crisis of Unemployment or Jobs Doomsday” envelopment is real in posterity. The need is to address the strategic challenge of population explosion squarely.  So also, labor law reforms must be addressed. Excessive focus on urbanization in short and mid-term contexts, however, may not squarely address the issue of providing “jobs for all” particularly low skilled rural workers. So,n upgrading of agriculture industry with value addition both for domestic and export markets exploiting 24×365 days geographical advantages is an imperative.

Otherwise, build up of revolution is distinct prospect.

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