Key Issue of 2019 Elections – Unemployment?


(Brig (rtd) GB Reddi)

As per India Today Karvy pre poll survey, unemployment with 37% tops the list of “Key Issues” to decide 2019 electoral outcomes.  Naturally, election manifestos of all political parties and their leaders will promise the moon to jobless youth. Of course, opposition parties are already blaming the Modi and the BJP for the soaring unemployment in India.

Unfortunately, what the analysts and senior editors like Rajdeep Sardesai failed dismally to highlight that “Unemployment” too is one dimension of National Security just as all other key issues identified.  All those participants failed to highlight such a glaring intellectual shortcoming of the debate. To view national security from the “Narrow or myopic” view of defense affairs exposes intellectual bankruptcy.

Be that as it may, what is the root cause for the “Crisis in Unemployment”? Who is to be blamed for it? Let me highlight that both Central and State Governments are squarely responsible for the crisis of unemployment.  Its root causes are simple: population explosion; and gargantuan corruption.

Instead of “Catching the Bull – population explosion – by its Horns”, mother of all STRATEGIC CHALLENGES, and containing it, out of fear of vote bank backlash, Indian political leaders, particularly the Congress Party, excel in making tall promises; by recourse to “catch the Tiger by its Tail.”

As on date, 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. Nearly 10 lakhs are entering India’s workforce each MONTH. Experts are projecting 28 crores to flood the workforce by 2050.  Instead of criticizing just for making headlines in visual media, I dare challenge opposition political parties and their leaders to formulate and submit the road map ahead for providing 10 lakhs jobs in a MONTH.

Having been in power for 49 years out of 67 years (1952-2019), the Congress Party is squarely responsible and accountable for abject failure to counter Himalayan challenges due to population explosion and gargantuan corruption.

India’s constraints are quite explicit. Land is finite; its load bearing capacity 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” by 2030.

In retrospect, India is in chaotic economic state what with the educational system incapable and ineffective to groom high-technology and highly skilled personnel to match their counterparts elsewhere to give capital-gain boost – all gifts inherited by Modi and the NDA largely from the Congress Party “poor governance”.

De facto, the blame for such absurd state rightly goes to the “Dynasty or scions” of the Congress Party surrounded by self-centric cronies who presided over the looting and scooting of natural resources particularly iron ore among many others including human hair and crushed animal bones.

Misplaced idealism on socialism and ‘License Raj’ obsession were self inflicted stumbling blocks that obstructed industrial growth and prevented and pre-empted indigenous “value addition”.

There are no easy escape routes or economic reform miracles available to emerge out of such dismal conundrum. Political stability and social unity is an imperative to overcome such past economic faux pas.

Jobs ‘doomsday’ is inevitable prospect if the population explosion and gargantuan corruption are not squarely addressed. Given the track record of the Congress Party and Regional Satraps, the choice before the voters is simple – reject them outright.

According to the labor bureau data, as years are passing by, India’s jobs creation and addition capability is dramatically reducing to include: 135,000 jobs during 2015, 421,000 in 2014, 419,000 jobs in 2013, 321,000 jobs in 2012, 929,000 jobs in 2011, and 870,000 in 2009.

Amit Shah, President of BJP, recently hit “the Nail on the Head” when he stated “Not possible to give government jobs to everyone in the country of 125 crores”. India’s population has already crossed 134 crores and racing ahead at 1.2% annual growth rate to reach 200 crores by 2050 with 5% unaccounted population taken into account.

How can the ruling regimes add on to the already existing “GOVERNMENT BULGE” beyond economic sustaining capability?

Even in the private sector, job creation prospects and opportunities are grim particularly with the ongoing massive lay-offs in the Information Technology sector and H1B Visa restrictions in USA, Australia and other countries even for B. Tech qualified students.

Let me reiterate that the so called 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 highly competitive.

India’s merchandise exports account for just 1.6% of the total trade. 58.2% of India’s total imports by value in 2016 were purchased from other Asian countries. European trade partners supplied 17.5% of import sales to India while 7.4% worth originated from North America with 7.3% coming from suppliers in Africa.

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 domestic use.

India imported nearly 33% of items valued around $ 85 billion in 2016: Electrical machinery, equipment: $37 billion (10.4%); Machinery including computers: $32.5 billion (9.1%) 5 billion; Organic chemicals: $14.8 billion (4.1%); Plastics, plastic articles: $11.4 billion (3.2%); Animal/vegetable fats, oils, waxes: $10.5 billion (2.9%); Iron, steel: $8.7 billion (2.4%); and Optical, technical, medical apparatus: $7.2 billion (2%). Surely, India boasts of technical excellence in electrical machinery, equipment, electronics, computers, and so on.

Be that as it may, what is the scope for employability of low quality human resources? 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.

Yet, political leaders are invoking jingoistic rhetoric and sloganeering to audiences to believe in things that don’t exist through declarations – as if they will be real. In retrospect, politicians either delude themselves or insult people’s intelligence. Worse still is the cacophony in the media as diversionary to exposing genuine dangers ahead.

Let me provide a peep into the situation in Telangana. The data available of “Employment Exchange” of Telangana includes: 13, 69,911 enrolled seeking jobs; 35,100 placements in Govt. Sector; and 12,036 placements in private sector. Today’s unemployed youth only want government jobs even if it is only a “peon or messenger or cleaner”.

Ipso facto, students are no longer excited about engineering. As per latest media reports, there are 422 engineering colleges in Telangana. Nearly 58 per cent of engineering graduates who passed out in 2018 are unemployed, according to AICTE data. The other 42% were mostly hired via campus.  Engineering seats have been reduced from 1.4 lakhs to 1.25 lakhs.

In reality, bulk of low-cost labor – masons, helpers, carpenters, marble layers – in Hyderabad hail from “Bangladeshi Muslim illegal migrants, Madhya Pradesh, Rajasthan and Uttar Pradesh carpenters. On enquiry in my neighborhood at a construction site as to why they have come from Madhya Pradesh to work in Hyderabad, their reply is most surprising – Rs.200 to 300 wages in Madhya Pradesh or even Delhi whereas they get Rs.500 to 600 in Hyderabad.

My earnest plea to political leaders and parties is to stop cheating gullible public by promising to create jobs fully knowing the existing “Government Bulge or Overextension.” Economic experts educated on western models of growth and development pontificate theories that cannot be implemented in the Indian environment. Few even attempt to invoke that if Japan could sustain its growth with a far higher density of population with limited natural resources, India too can do it.

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

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.

Under “Make in India” slogan and initiative, the government has eased restrictions on foreign investment in the defense, railway, civil aviation, and broadcasting and pharmaceuticals sectors. India has even taken some tentative steps toward liberalizing India’s capital markets.

Next, agriculture, mostly seasonal, has lost ground due to dismal failure to accelerate transfer of modern technologies to include green houses, drip and sprinkler irrigation, besides ravages of drought and floods. From 52 percent of the country’s gross domestic product in 1950, the share retracted to 18% in 2014. Since more than two-thirds of India’s population lives in rural areas, agriculture still remains full time occupation for majority.

If development of agriculture as industry to include dairy farming, floriculture, fisheries and forestry is progressed, it would be possible to absorb low skilled rural labor. But, it requires huge financial investments, technical expertise and marketing infrastructure. Unfortunately, agriculture has not been given due attention for absorbing rural unemployed labor.

The redeeming feature of Indian economy during the past two decades is the growth of services sector enabled by relatively low labor costs and large number of English speakers for business process outsourcing. Exports of information and communication technology make up 17% of the total worldwide. Today, the country ranks fifth among the world’s top services exporters. Personal remittances to India rose from $2.4 billion in 1990 to $70.4 billion in 2014 due to inflows from IT professionals and Indian work force in West Asia. $33 billion trade surplus was created in services — compared with a $126 billion trade deficit in goods.

But, the IT bubble ‘bust’ is almost threatening to derail the services sector. Tourism offers tremendous prospects. Rightly, the focus on development of smart cities, start ups, digitization, infrastructure and other initiatives if efficiently implemented offers hope.

Finally, Indian economy also needs to progressively and incrementally implement digitalization. Job growth is rapid in high-digital level occupations, such as computer-mathematical and business-finance occupational groups, as well as in low-digital level occupations, such as personal care and food preparation. By contrast, middle-digital occupations, such as office-administrative and education occupations have seen much slower job growth.  Women, with slightly higher aggregate digital scores represent about three-quarters of the workforce in many of the largest medium-digital occupational groups, such as health care, office administration, and education.

What is its implication? Simple – high quality education. It is not easy to rapidly enhance the quality education from the inherited static and stagnant low quality education particularly in rural areas.

In sum, the current state of many spheres of economic activity is in a dismal state – due mainly on account of faulty policies and very poor implementation during the past 70 years. Any rapid breakthroughs, in retrospect, are a “Himalayan Challenge.” The “Crisis of Unemployment or Jobs Doomsday” envelopment is real in posterity. The need is to address the strategic challenge of population explosion – mother of all challenges squarely. Also, stem the tide of corruption promoted under Congress Party regimes in the past.

What does it also imply? If India, struck perpetually at cross roads, is to move ahead, then voters must exercise their choices ion favor of political stability in favor of those political parties that can ensure the nation to traverse on even keel. Wake up “We the People of India, cutting across the country and the social spectrum” and exercise your vote in favor the political party that can ensure political stability vital for peace, progress that is necessary for growth and development.