I was very happy that I was able to read an entire speech of Prime Minister Narendra Modi in English, thanks to Economic Times. He spoke in Hindi, and I assume the translation was accurate. Mr Modi congratulated his government and told the World Leaders Forum that in the past ten years “our economy has expanded by nearly 90 per cent”. Admirable — if it was correct. The numbers that I have are:
On 31 March 2014 Rs 98,01,370 crore
On 31 March 2024 Rs 173,81,722 crore
The increase was Rs 74,88,911 crore and the growth factor works out to 1.7734 or a growth rate of 77.34 per cent. Even that is good for a developing country. Of course, one must compare that rate with the rates of the previous two decades since liberalization. Between 1991-92 and 2003-04 (13 years) the size of the GDP (proxy for the economy) doubled. Again, between 2004-05 and 2013-14 (10 UPA years), the size of the GDP doubled. I had estimated that the GDP would not double in Mr Modi’s ten years and said so in Parliament; the prime minister has now confirmed it. India’s economy has indeed grown but we could have done better.
Unemployment — the Elephant
In his speech, the prime minister said, “…today, the people of Bharat are filled with a renewed confidence.” Just a few days ago, we saw news reports that 395,000 candidates, including 6,112 postgraduates, 39,990 graduates and 117,144 who had studied upto Class 12, had applied for the position of sweeper in the Haryana government at a salary of Rs 15,000 per month on a contract basis. Surely, that is no sign of “renewed confidence”. I know there are apologists who will interpret the story to mean that people already employed are seeking the security of a government job! I do not wish to break their reverie.
The prime minister also said “The aspirational youth and women of Bharat have voted for continuity, political stability and economic growth.” Many observers think that the vote was for the opposite. The vote was for change, constitutional governance and growth with equality. The two sets of goals are poles apart: continuity vs change, political stability vs constitutional governance and economic growth vs growth with equality. Just as the prime minister tried to make a case for approval of his set of goals, a powerful argument can be made for people’s disapproval of the BJP’s governance, and desire for a re-set of the goals.
Wanted a Re-set
I wish to stay on ‘unemployment’ in this column. The All India unemployment rate, according to CMIE, is 9.2 per cent. The Congress Manifesto 2024 said that after 33 years since liberalization, “the time is ripe for a re-set of economic policy”. The Manifesto put forward two specific proposals on ‘jobs’:
n Apprenticeship scheme that will guarantee a one-year apprenticeship to every graduate and diploma holder to impart skills, enhance employability and provide regular jobs to millions of youth.
n Employment-linked Incentive scheme (ELI) for corporates to win tax credits for additional hiring against regular, quality jobs.
I was delighted when the finance minister borrowed the ideas and included them in her Budget speech. Mr Modi and his ministers were sworn in on June 9, 2024. The BJP claimed that a third-term Modi government will have a plan ready to be rolled out in the first 100 days. The 100 days will be completed on September 17. The government has shown no urgency to roll out the two Budget announcements. Contrast the zeal with which the government tried to pass the Wakf (Amendment) Bill and push the lateral entry into senior government positions; they were forced to put both on ‘pause’.
Bad News Mounts
Meanwhile, we have more bad news on the employment front: Indian companies have laid off people in 2023 and in 2024. Among them are Swiggy, Ola, Paytm, etc. Tech companies have announced that they are in the process of rightsizing their workforce.
In a column in Times of India, September 5, 2024, two educationists reported that IIT Mumbai has been able to place only 75 per cent of its graduating class this year. Adjusted against the exchange rate, the salaries seem static. The placement of graduates of institutions other than the IITs is at a disappointing level of 30 per cent
The World Bank’s India Economic Update (September 2024) reported that urban youth unemployment rate remained elevated at 17 per cent. Thanks to a muddled trade policy, India has not increased export earnings from labour-intensive sectors such as leather and garments. The World Bank report advised a critical review of India’s approach to trade and pointed out that India has not been able to take advantage of China’s withdrawal from labour-intensive manufactured goods. The report pointed to India’s protectionist policies and aversion to free trade agreements.
The issue of unemployment will not go away by denial or rhetoric or fake statistics. Unemployment is a ticking time bomb and the Modi 2.1 government has done nothing — absolutely nothing — to address to defuse it since June 9.
