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Mainstream, Vol XLV, No 40

Unemployed India At Sixty : The Reality Bites

Wednesday 26 September 2007, by Suvrokamal Dutta

Economic reforms have no doubt ushered in an economic boom in India but this boom hasn’t created any jobs.

The Ninth Five-Year Plan had projected that 54 million new jobs would be generated from 1997 to 2002 but the performance has fallen very short of its target as in the past. India’s labour force is growing at a rate of 2.5 per cent annually but its employment rate is growing only at the rate of 2.3 per cent; thus the country faces the challenge of not only absorbing new entrants in the job market (estimated at seven million people every year), but also clearing the backlog.

Sixty per cent of India’s labour force is self-employed, out of which almost 85 per cent remain below or just above the poverty line. Thirty per cent of India’s labour force is casual, working only when they are able to get a job and the remaining unpaid for the rest of the year. Only 10 per cent are regular employees, two-fifths of whom are employed in the public sector.

More than 90 per cent of India’s labour force works for employers who do not provide any social security. In rural areas, agricultural workers form the bulk of this “unorganised” sector; in urban areas they are contractors, sub-contractors, and migratory agricultural labourers. Seventy per cent of the labour force (both organised and unorganised) is either illiterate or educated below the primary level.

The Ministry of Labour’s annual report for 1995-96 stated that around 18.7 million people in India are unemployed. The Eighth Five-Year Plan projected 19.5 million as unemployed. According to the Planning Commission, the States where the prospect of increased unemployment is greatest for the period of 2002-07 are Bihar, Rajasthan, Uttar Pradesh, Kerala, and Punjab.
In India agriculture absorbs 62 per cent of the labour force, manufacturing and construction 16 per cent, services 10 per cent, and miscellaneous jobs 12 per cent. Since agriculture in India is seasonal, the problem of unemployment is actually much more acute.

In 2002, 33.59 per cent of the total population of India was between the age-group of 0-14 years, 59.41 per cent between 15-59 years and seven per cent above 60 years of age. Participation in the labour force per thousand in 1997 for the 15-19 age-group was 517 for males, which is expected to fall to 412 by 2012. In 1997, the 60-plus age- group participation for males was 637, expected to remain constant by 2012. For women, the 15-19 age-group in 1997 was 302 per thousand, and is expected to fall to 241 by 2012. For the 60-plus age-group, it was 205 per thousand, and is expected to remain constant by 2012.

The NDA Government claimed that between 2000 and 2004, 8.4 million new jobs were created, which no doubt is a significant achievement if true. However, statistical data indicates otherwise. The present UPA Government boasts of giving guaranteed employment of 100 days to one member of a family below the poverty line and claims that it will generate 10 million new jobs every year. So far nothing serious has started on this front.

These claims are no doubt far-fetched, as so far nothing concrete has happened except for the regular mud-slinging match between the UPA and the NDA on the job front, while the real issue of unemployment remains unaddressed even after sixty years of Indian independence.

With an estimated population of 1028.93 million on April 1, 2002 and a total labour force of 449.62 million in 2002, of which only 416.4 million are employed, the situation is terrible. The population is expected to rise to 1196.41 million by 2012, with a projected labour force of around 562.91 million and total employment around 500.02 million. With such a huge gap between the labour force and employment, the crisis will deepen all the more. It is a sad irony even after almost 60 years of Indian independence, successive governments have failed to solve the problem of unemployment.

The so-called talk of a job boom in India turns out to be a myth when viewed from the available statistical data. With few million jobs being generated in the software, IT and services sector, the Government of India and the various State governments cannot run away from the reality that traditional sectors in India are horribly unemployed; worse is the situation in the agricultural and small scale sectors. It is time for the government of the country to do something about this instead of giving self-pleasing sound bytes. If the Feel Good and India Shining of the NDA turned out to be a blatant lie, the Bharat Nirman and Rural Employment Guranteed Scheme of the UPA are not upto the mark. But then that is the dismal reality of the political will in our country and no matter how sad we feel about it, the reality that India is suffering from massive unemployment must be acknowledged. The question arises as to whether the politicians of our country really care about it. The answer is perhaps a dismal no. It is this reality which is gradually killing the nation. The bitter truth is that India is horribly unemployed even after sixty years of independence. It is this reality which bites.

The author is a well-known foreign affairs and economic expert; he is the Chairman, Global Council for Peace, and the convenor, Debating India.

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