jobs in india

Job Creation: India Needs New Sectoral Plans, as an Overarching Employment Strategy Won’t Work

From agriculture to service sector, every sector has unique set of complexities in terms of job creation. India just doesn’t need more jobs, but good ones enough to help unemployed youth to attain upward social mobility.

India’s disjointed, highly heterogeneous and stratified employment landscape has seen significant changes over the years, highlighting the importance of identifying which sectors have experienced notable growth and how employment patterns have shifted.

While some sectors have the potential to transform the labour market, others have lagged. There is an urgent need for a comprehensive jobs-oriented industrial policy with an updated employment strategy to not focus on any job creation, but one that has ‘good’ and secured employment for upward mobility while meeting the workforce’s aspirational demands. We try to present some critical reflections on these interconnected issues here.

Establishing a stronger growth-employment link

When examining the relationship between economic growth and unemployment, we find that a 1% increase in GDP results in a 0.31% increase in employment. In the short term, the effects of growth are even more pronounced, with a 1% GDP increase leading to a 0.95% rise in employment.

Figure: Growth vs Unemployment (CMIE)

While the growth rate has shown significant recovery since the dip in 2021 and the unemployment rate has gradually decreased, the employable population has consistently increased. Projections indicate that it will reach 64.9% by 2040. However, this raises the question: are there enough jobs to meet the demand and accommodate the growing workforce?

Figure: Projection for Employable Population Over the Years (Source: ORF)

In recent years, agriculture has remained the primary employer in India, but its share of employment has declined from 2021-22 to 2023-24. During the same period, employment in the industrial sector initially increased from 2021-22 to 2022-23, only to fall again. In contrast, the services sector has experienced steady and exponential growth from 2021-22 to 2023-24.

Figure: Employment in India (Source: CMIE)

Unveiling the service sector’s potential for job growth

A recent report by the Observer Report Foundation (ORF) on India Employment Outlook 2030: Navigating Sectoral Trends and Competencies emphasises the service sector’s pivotal role in driving employment growth.

It highlights 10 high-opportunity sub-sectors within the service industry poised for rapid growth, including digital services, financial services, healthcare, hospitality, consumer retail, e-commerce, renewable energy, global capability centres, and the MSME and start-up ecosystems. Since FY2019, IT has seen substantial growth followed by finance and banking.

High growth sectors

Further, a recent study by the Bank of Baroda also notes that the information technology (IT), banking, and finance segments within the service sector accounted for nearly half of the new jobs created by India Inc. in FY23. Of the 8.12 million new jobs, these three service sectors generated 3.91 million (48.2%). The IT sector led with 2.06 million jobs, followed by banking with 1.25 million, and finance with 575,000.

Within the banking sector, 49.1% of the 1.6 million employees work in the public sector. Additionally, the share of gig workers in the workforce is expected to rise from 1.5% to 4.1% by 2029-30.

Other sectors such as healthcare (2.4%), chemicals (2.1%), infrastructure (1.7%), plastics (0.8%), paper (0.8%), and hospitality (0.1%) registered a compound annual growth rate (CAGR) below the national average of 3.1% during this period.

To fully harness the growth potential of the service sector, India’s new industrial policy should focus on targeted strategies that create jobs and absorb new labour. Further, incentivising job-intensive MSMEs is key for creating jobs in manufacturing too. There is no either-or strategy between manufacturing and services here. One has to look at both of these as job-creating spaces and address the inconsistencies or inadequacies in the nature (quality) of employment for better upward mobility.

There is a need to establish a supportive framework for gig workers by providing social security benefits, health insurance, and access to credit while encouraging platforms to adopt fair labour practices and offer training programmes. Additionally, there is a need to promote collaboration between the government and private sector to drive growth in high-employment elasticity sectors such as tourism, hospitality, and financial services.

Also read: Youth Made Up 82.9% of India’s Unemployed Population in 2022: ILO

Empowering MSMEs for economic growth and job creation

When we shift this focus towards Micro, Small, and Medium Enterprises (MSMEs), we see that they are vital to India’s economic growth, contributing over 30% to the GDP and playing a significant role in exports. According to the recent data, from the Udyam registration portal, 4.68 crore Udyam-registered MSMEs have provided over 20.19 crore jobs, marking a 66% increase from the 12.1 crore jobs reported in July of the previous year. Impressively, 4.54 crore of these jobs are held by women, highlighting the sector’s impact on female employment. MSMEs are the second-largest source of employment in India after agriculture, supporting millions of livelihoods nationwide.

The Indian government has launched several initiatives to bolster MSMEs, focusing on improving credit access, advancing technology, and providing skill development programmes. Between July 2020 and August 2023, MSMEs employed approximately 123.6 million people across the country. The 2024-25 budget includes a new Credit Guarantee scheme to help MSMEs secure financing, employment incentives to encourage hiring, and the establishment of Plug and Play infrastructure in 100 large cities.

The Prime Minister’s Rs 2 lakh crore package aims to create employment, skilling, and other opportunities for 4.1 crore youth over five years.

A new employment policy could further enhance MSME growth by offering targeted support, such as tax breaks for MSMEs that create jobs in high-growth sectors, and by promoting digital transformation through technology adoption incentives. Additionally, strengthening partnerships between MSMEs and educational institutions can ensure that skill development programmes align with industry needs, preparing the workforce for future demands and enhancing the competitiveness of MSMEs in the global market.

Healthcare sector: Expanding opportunities amidst challenges

One of the other key sectors has been the healthcare sector, with an ageing population, the demand for healthcare workers has grown substantially. The healthcare industry, employing 4.7 million people, is one of India’s largest employers and is projected to grow further. The hospital industry alone was valued at USD 61.79 billion in 2017.

However, there is a critical shortage of trained healthcare professionals, with a deficit of at least 1.54 million doctors and 2.4 million nurses. This shortage is exacerbated by environmental degradation, changing lifestyles, and a rising elderly population expected to double in the next two decades.

The healthcare sector, valued at approximately USD 372 billion and growing at a CAGR of 22%, also reflects increasing consumer preference for home healthcare services, which is projected to reach USD 21.3 billion by 2027.

Furthermore, global sovereign funds and long-term investors are eager to invest in India’s hospital sector. Exempting hospitals with over 100 beds and built on more than 100,000 sq. ft using Infrastructure Investment Trusts (InvITs) from GST could unlock significant expansion opportunities. This policy could attract international funds to build hospitals across India while allowing local management. Listing these InvITs could also provide a sustainable capital source.

Agriculture: India’s largest employer facing persistent challenges

As anticipated, agriculture remains India’s largest employer. Data from the Reserve Bank of India shows that agricultural work contributed 48 million of the 100 million jobs created between FY 2017/18 and 2022/23. The Economic Survey of 2022-23 notes that 65% of the population lives in rural areas, with 47% depending on agriculture for their livelihoods. Despite this, inadequate income continues to be a major issue for rural workers.

In FY23, employment in agriculture, hunting, forestry, and fishing reached a 17-year high of 253 million, according to RBI data. This was the first time since FY07 that agriculture employment exceeded 250 million, with an addition of 50 million jobs in the past four years alone. In FY23, agriculture added 4.8 million jobs, surpassing the combined additions from manufacturing and trade, which totalled 4.4 million.

Figure: People Employed (in millions) in Agriculture Over the Years

To address these challenges and support sustainable growth in agriculture, the new employment policy should include targeted measures to enhance agricultural productivity, provide financial support for rural workers, and promote technological advancements in farming practices. While the budget for 2024-25 addresses some of these issues, the effectiveness of its measures will depend on robust implementation.

How can India’s manufacturing sector sustain employment growth?

When we look at manufacturing, despite its importance to the economy, employment in India’s manufacturing sector has stagnated and even declined over the past decade, particularly in urban areas. Technological advancements have increased automation and shifted the sector towards a more capital-intensive model, raising concerns about its ability to absorb the expanding workforce.

According to the World Bank, manufacturing’s contribution to India’s GDP has decreased from around 17% two decades ago to 13% in 2022, and since Prime Minister Modi’s first election, India has added only five million manufacturing jobs, bringing the total to 65 million.

Initiatives like Make in India and increased imports from the US have not yet reversed this trend. To rejuvenate employment opportunities, a transition towards integrating industrial value chains with the service sector is recommended. Leveraging public policies and initiatives such as Digital India, Pradhan Mantri Kaushal Vikas Yojana (PMKVY), Start-up India, Production Linked Incentive (PLI) Schemes, and PM Vishwakarma Yojana is crucial for stimulating job creation.

As the manufacturing sector becomes more capital-intensive, the capital-to-output ratio is expected to decline while the capital-to-labour ratio rises.

Overall, sectors with high employment elasticity, capable of generating more jobs, should receive increased investment and support. The primary sector, especially agriculture, currently exhibits negative employment elasticity, indicating limited short-term job creation potential due to technological advancements and increased capital intensity.

Conversely, the secondary sector shows mixed results, with negative elasticity in urban areas but potential for positive job growth in specific contexts.

To facilitate natural transitions in employment, policies should encourage movement from agriculture to related fields like agri-product processing and retail services. This approach aligns with structural transformation, where economies shift from agriculture to industry and services. Given the high employment elasticity of India’s service sector, growth in industries such as tourism, hospitality, financial services, and healthcare should be prioritised. Services can absorb surplus labour released from capital-intensive production in agriculture and industry.

Additionally, greater cohesion on job-centered public-private partnerships can develop job-ready semi-skilled and skilled workforces (though the skilling process needs a whole separate discussion), driving employment through co-investment and innovation. Some creative destruction would happen but that needs to be anchored (for the benefit of job creation) purely by market forces not through government coercion.

Strengthening R&D within businesses can further lead to this – with high-value products and job creation taking place along the value chain. Optimising MSME value chains in Tier-2 and Tier-3 cities can also boost sales and create employment opportunities in smaller towns. What remains lacking is the mechanics of ensuring this which the current government machinery (and its policy ecosystem) has failed to ensure.

Deepanshu Mohan is Professor of Economics and Dean, IDEAS, Office of Interdisciplinary Studies and Director, Centre for New Economics Studies (CNES), O.P. Jindal Global University. He is a Visiting Professor at the London School of Economics and an Academic Fellow with University of Oxford. Aditi Desai is a Senior Research Analyst with CNES and a Team Co-Lead for its InfoSphere initiative.

Savings at 47-Year Low, Subdued Consumption, Low Wages, Job Woes: The Troubles Facing India’s Economy

There is a clear mismatch between GDP growth and private consumption. However, the government still expresses confidence that the Indian economy is set to maintain its growth trajectory.

New Delhi: India’s household net financial savings in fiscal year 2023, as a percentage of gross domestic product (GDP), was at 5.3% – the lowest in around five decades.

Between FY12 and FY22 (excluding the COVID-19 year FY21), the net financial savings hovered between 7-8%, the Financial Express reported.

This is not a new revelation as these numbers were released by the Reserve Bank of India in September last year. However, the finance ministry, at the time, had said that “changing consumer preference for different financial products” was the real cause for decline in net financial savings of households. And therefore, these numbers are not a sign of rural distress.

Meanwhile, access to credit has surged.

“Bank advances”, or short-term credit, which come under financial liabilities, usually availed through credit cards jumped 54% on year in FY23. This was the fastest growth recorded since at least FY12, the business daily reported.

In a scenario of weak wage growth and leveraged consumption, consumption growth is likely to be hit, economists told FE.

In FY23, the growth in private final consumption expenditure had come in at 6.8%, and in FY24, at 3% (as per NSO’s second advance estimates).

The issue of rural distress has been echoed by big FMCG firms. Rural wage rates have been consistently lower over the last decade. High inflation and a poor monsoon season have added to the stress. In addition, demand for work under the rural employment programme MGNREGA has increased.

Meanwhile, rising food prices have hit the financially underprivileged sections. A lack of quality jobs and stagnant income growth are adding to these troubles. However, the chief economic advisor (CEA) clarified that the government cannot solve all social and economic problems such as unemployment.

Interestingly, 2022-23 saw the highest number of government investment projects being dropped in the last few decades. Over 1,100 projects were dropped in that year. This is significant as more investments by the government and private sector lead to demand for more labour, and hence, more jobs. In fact, the CEA said that growing investments are going to create more job opportunities during the decade.

But even private investments have been consistently dropping over the last few decades.

Separately, The Wire’s M.K. Venu wrote in March: “There is a clear mismatch between GDP growth and private consumption. For 2023-24, GDP growth is officially projected at 7.6% but consumption growth is just about 3%.”

“Well-known economist and former Chief Statistician of India Pronab Sen told me that normally consumption growth numbers correlate very closely with the GDP growth figure. He says if GDP growth is X percent then consumption growth can at most be 0.5 to 1 percentage points less than X,” he said.

“This means if GDP growth is 8.4 % for the third quarter of 2022-24, then consumption growth should be at least 7.4 %. But official data shows trend consumption growth only at about 3%. This major contradiction remains unexplained. Experts say the private sector will not start investing in fresh capacity if consumption growth is so tepid.”

However, in an interview to the Times of India on February 4, 2024, finance minister Nirmala Sitharaman expressed confidence that the Indian economy is set to maintain its growth trajectory, and the government is poised to effectively control inflation.

Jobs in the Congress Manifesto: A Promise and a Hope

From a Right to Apprenticeship to revamped affirmative action, the Congress Nyay Patra tackles the severe challenges in India’s job market today.

Great evil portends greater good.
∼ Nichiren Daishonin, 13th-century Japanese Buddhist sage

After a ‘lost decade’ of electoral autocracy and rising wealth and income inequality, the ruling party is not fighting the 2024 election based on its successes or record. Meanwhile, the Congress party, with its 2024 manifesto or ‘Nyay Patra’, has managed to produce one of the best manifestos in its recent history. It embodies the ingredients, processes and commitment required to revitalise India’s constitutional democracy and jobs. The Five Nyay – on the youth, women, workers, farmers and marginalised sections – mark a new beginning in the country. Once implemented in letter and spirit, they could heal the wounds of society, bring the economy back to prosperity and restore constitutional democracy. Even as we believe these reforms should have preceded the economic reforms of 1991, it is timely to put them up now.

Here we focus only on the jobs-related commitments in the manifesto.

Youth justice, one of the Five Nyay, holds immense potential for jobs. Under it, the Right to Apprenticeship promises that every post-secondary pass-out (whether a one year-certificate, two-year diploma or degree holder) a Rs 1 lakh annual stipend. There is already an Apprenticeship Act of 1961, which has not delivered apprenticeship opportunities in the organised sector as it was supposed to. With a workforce of 570 million in 2023, India still has no more than 600,000 formal apprentices. Except the Central PSU and state PSUs, neither large private corporates nor MSMEs have adopted apprentices. This is a serious problem for the youth, with youth unemployment rates doubling between 2012 and 2023 according to government PLFS data, or much worse (44% for 20-24 year olds according to CMIE data in 2023). This must change if the youth are to get a pathway to the world of work from their education.

The most successful apprenticeship programmes exist in Germany, which has had a record of maintaining the lowest youth unemployment rates in Europe. Young graduates suffer from a disadvantage in any labour market: they have no work experience. Therefore, employers are wary of hiring them. So the apprenticeship is an opportunity to a) work and receive a stipend, while b) getting training. It is the best of both worlds of work and education. That is why a one year Right to Apprenticeship is being welcomed by the youth, and even Indian employers.

Also read: Challenge for Congress: Can it force the BJP to talk about price rise and unemployment?

Besides, the Skill India programme is not delivering. Therefore, it was wise for the Congress to adopt a Right to Apprenticeship, which would boost both skill formation and employability. This is critical for realising India’s demographic dividend that will expire after 2040.

Besides, the Congress promise of filling 30 lakh central vacancies in the government sector is a recognition of the fact that India has among the lowest public or civil service per 1,000 population in the world. Filling vacancies will kill several birds with one stone: not only will regular government jobs with social security increase, but it will improve the quality of public social and economic services. It is important, of course, that Group D positions should still not be filled with regular permanent staff, as 89% of all government servants in India consist of Groups C and D staff (or lowest levels).

In addition, calling off the Agnipath scheme will instil a sense of pride and confidence in the youth. As important and praiseworthy is the guarantee of the party to restructure the Fund of Funds Scheme for supporting start-ups.

An additional promise in the Congress manifesto is notable. State government appointments in state after state have been held up year after year, on account of ⁠paper leaks. The Congress guarantees new laws to ensure the highest standards of integrity and fairness in the conduct of public examinations. In addition, the Congress plans to create a corpus to incubate start-ups, with allotments spread across all districts of the country for a period of five years. Youth below the age of 40 years can avail start-up funding for their business enterprises in any sector.

Equally important and timely is the promise of gender justice.

As always, women have been the worst affected during the COVID-19 pandemic in India, mainly because of the poor financial support that they had. Among the migrant workers deserting the urban areas, there were heart-wrenching episodes of suffering of women, including labour pains and delivery on roads. Had there been money with them, the casualties could have been avoided. The Mahalakshmi scheme promising cash transfer of Rs 1 lakh annually per household will empower millions of households and women in particular. The guarantees for keeping one-third seats of all legislatures for women candidates will bring gender justice in other ways.

Also read: Congress Party Manifesto Draws a Roadmap to an India Free From Fear

In addition, filling 50% jobs in the Union government will further empower women. Women’s labour force participation in India is very low, and has been falling, despite the fact that young women are getting much better education. Such better educated women don’t want to be in agriculture, which they have been forced to join in the last three years, especially to work on the family farm.

The Congress manifesto also promises to undertake a comprehensive social, economic and caste census that will survey the population, their social and economic status, and communities’ share in national wealth and representation in institutions of governance to revolutionise India’s affirmative action policy. This is essential to implement another job-related guarantee: the Aarakshan ka Haq. The Congress guarantees that it will pass a constitutional amendment to raise the 50% cap on reservations for Scheduled Castes, Scheduled Tribes, and Other Backward Classes.

Participation justice (bhagidari nyay) forms the core of India’s constitutional democracy. It is not doles and transfers that pull people out of poverty, but equitable justice. The promise of increasing the participation of SC/ST/OBC communities in all wings of the Indian state will bring a phenomenal change in the self-respect of 85% of the population. This will correct the skewed and over representation of a few communities in the mainstream, in fact the domination they enjoy in India in every aspect of economic and social life. The promise of improving their participation in public works contracts will help reduce economic inequality across communities.

Finally, there are two other potential job creating promises in the Congress manifesto. There is a very promising new focus on MSMEs and supporting them. More importantly, the Performance Linked Incentive Scheme is to be totally restructured. Of the current PLI sectors identified for subsidisation to support Indian manufacturing, 12 of the 14 sectors are capital intensive ones. So in fact, rhetoric will hardly create new jobs. Congress wants to start a new PLI for labour intensive manufacturing which will create more jobs. This is essential since manufacturing share in GDP had fallen from 17% (its consistent share over the preceding 25 years), since 2016 to 13% of GDP by 2021. It has only just risen to 17% again. Manufacturing share of employment still remains lower; not surprising since total manufacturing employment, which was 60 million in 2012, had fallen to 55 million by 2019,and has barely climbed back up to over 60 million in 2022.

Santosh Mehrotra is a retired professor of economics, School of Social Sciences, Jawaharlal Nehru University. Bir Singh is a JNU PhD in economics, and teaches economics in Delhi University.

Youth Made Up 82.9% of India’s Unemployed Population in 2022: ILO

Nearly, 82% of the workforce engages in the informal sector, and nearly 90% is informally employed, the report underlined.

Ahead of the Lok Sabha election, the crisis of unemployment unites India as few things do. Why are important sections of India out of work? How do unemployed Indians live? Why is the work available not enough to earn a livelihood? How do Indians secure employment? How long is the wait? With India out of work, The Wire unveils a series that explores one of the most important poll issues of our time.

New Delhi: Unemployment in India is predominantly a problem among youths, especially young people with a secondary or higher level of education, and it has intensified over time, according to a a recently released International Labour Organisation report.

In 2022, the share of unemployed youths in the total unemployed population was 82.9%. Further, the report mentioned that the share of educated youths among all unemployed people increased 11.5% from 54.2% in 2000 to 65.7% in 2022. Among the educated (secondary level or higher) unemployed youths, women accounted for a larger share (76.7%) than men (62.2%).

The report titled India Employment Report 2024: Youth employment, education and skills underlines that the problem of unemployment in India has become increasingly concentrated among the youth, especially educated youths and women in urban areas.

Share of unemployed educated youths (secondary or higher) in total unemployed persons (UPSS), 2000, 2012, 2019 and 2022 (%). Photo: India Employment Report 2024: Youth employment, education and skills (ILO)

The report pointed out that in 2022, the unemployment rate among youths was six times greater for those who had completed secondary education or higher (18.4%) and nine times higher for graduates27 (29.1%) than for persons who could not read or write (3.4%). Moreover, this trend was higher among educated young women (21.4%) than men (17.5%), especially among female graduates (34.5%), compared to men (26.4%) with similar qualifications. In general, the unemployment rate among educated youths grew from 23.9% in 2000 to 30.8% in 2019, however, it fell sharply to 18.4% in 2022.

Illustration: Pariplab Chakraborty. Photo: Intifada P. Basheer and Azam Abbas

Another factor highlighted by the report is that the quality and condition of employment among youths are poorer compared with the older cohort, although more youths are in industry and services. They are more likely to be engaged in self-employed unpaid family work and casual wage work. They are also more likely to be involved in no-skill and low-skill informal work, which typically offers lower wages or earnings.

Nearly, 82% of the workforce engages in the informal sector, and nearly 90% is informally employed, the report underlined. Further, a significant proportion of regular workers in the formal sector are informal — “informalisation” of the formal sector is a visible development — this trend was accentuated between 2019 and 2022, as reflected in the decline in the proportion of regular formal workers or better-quality work.

The ILO report noted that the persistence of self-employment is a feature of the Indian labour market, and self-employment continues to constitute about half of total employment in the economy, which is one of the highest in the world.

However, self-employment is not necessarily a positive trend in the Indian labour market since the report highlighted a considerable gap in wages and earnings. In 2022, regular workers earned an average of Rs 19,010 per month, followed by self-employed individuals earning Rs 11,973 and casual workers earning Rs 8,267. There was a gender gap in the average monthly earnings as well, with self-employed individuals having the largest gender gap in earnings, followed by casual workers and regular salaried workers, the report cited.

Labour force participation rate and gender

According to the study, the labour force participation rate (LFPR) among youths has been declining, with a reduction from 54% in 2000 to 42% in 2022, and the decline has been sharper among youths aged 15-19 compared to youths aged 20-24 and 25-29. The LFPR in India for individuals aged 15 years and older was 55.2% in 2022, which was lower than the world average of 59.8%.

It consistently declined over the past two decades, from 61.6% in 2000 to 50.2% in 2019, before increasing to 55.2% in 2022. The worker population ratio also exhibited a similar trend, declining from 60.2% in 2000 to 47.3% in 2019 before increasing to 52.9% in 2022, the report mentioned.

Labour force participation rate, worker population ratio and unemployment rate (UPSS) among persons aged 15+ (rural and urban combined), 2000, 2012, 2019 and 2022 (%). Photo: India Employment Report 2024: Youth employment, education and skills (ILO)

Moreover, there is a significant gender gap in the labour market. In 2022, the LFPR of young men stood at 61.2% compared to young women at 21.7%, and the gender gap was similar in both rural and urban areas.

The report also highlighted that the female LFPR declined sharply (by 14.4 percentage points) when compared with the male counterparts (by 8.1 percentage points) between 2000 and 2019. However, this trend reversed between 2019 and 2022, with a much greater increase in the female LFPR (by 8.3 percentage points) than in the male LFPR (by 1.7 percentage points).

In 2022, women’s LFPR stands at 32.8% which is around 2.3 times lower than the rate for men which is at 77.2%. Overall, India’s low LFPR is largely attributed to the low female LFPR, which is much lower than the world average for 2022 — 47.3% — but higher than the South Asian average of 24.8% (ILO 2023).

Further, the report pointed out that the LFPR declined significantly more in rural areas (by 14.1 percentage points) than in urban areas (by 3.5 percentage points) between 2000 and 2019. However, this pattern reversed between 2019 and 2022, with a much higher increase in the LFPR in rural areas (by 6 percentage points) than in urban areas (by 2.1 percentage points).

Also read: Low-Paying Apprenticeships, False Promises, Convenient Narratives: The Skill India Dream

Skills vs employment

The share of high- and medium-skill jobs increased from 5.1% in 2000 to 9.6% in 2019, while low-skill jobs increased from 60.5% to 65.1%.

Simultaneously, the share of unskilled jobs decreased from 34.4% in 2000 to 25% in 2022. These trends suggest a rise in high- and medium-skill jobs and a decline in no-skill or routine-type jobs. However, the trend shifted, with a consistent increase in low-skill jobs and a decrease in high- and medium-skill jobs between 2019 and 2022.

The share of high- and medium-skill jobs increased from 5.1% in 2000 to 9.6% in 2019, while low-skill jobs increased from 60.5% to 65.1% in the same period.

Occupation-based skill structure of employment (UPSS, aged 15+), 2000, 2012, 2019 and 2022 (%). Photo: India Employment Report 2024: Youth employment, education and skills (ILO)

Most of the employment growth in the tertiary sectors occurred in business, finance, real estate, health, education, communications and hotels and restaurants between 2000 and 2019.

General employment challenges

The report pointed out that the gap in earnings across gender and other social categories has declined over the years but the broad socio-economic hierarchies in access to employment, education and earnings persists.

Despite affirmative action and targeted policies, the Scheduled Castes and Scheduled Tribes still lag in terms of access to better jobs. Scheduled Castes and Scheduled Tribes have greater participation in work due to economic necessity but engaged more in low-paid temporary casual wage work and informal employment.

Moreover, the report pointed out that the geographical distribution of employment characteristics shows that the share of regular, formal and organised sector employment and high-skill jobs is significantly larger in the South, West and North-East regions than in the East and Central regions in 2022.

As per the report, there are five general employment challenges.

First, India is experiencing a “stunted” structural transformation which means there has been falling employment intensity in the growth process. Unliked most developed countries, the growth process in India is services-led and not manufacturing-led.

Second, the jobs requiring low skills have been contracting and the jobs requiring high skills have been increasing. Moreover, the labour market exhibits high levels of inequality in terms of regions, social groups, gender and occupation.

Third, many large states in the eastern and central parts of India are characterised by a youth bulge. These states are relatively underdeveloped and have low per capita income and have a small proportion of highly educated youths, low incidence of formal (regular) employment and a large proportion of young people not in employment, education or training, which underscores the need for regional policies designed to address such differences in the employment situation for youths and promote more-balanced opportunities. Therefore, there is disparity in employment outcomes, particularly youth employment, across the regions, the report mentioned.

Fourth, the proportion of youths with a higher education level rose substantially among unemployed persons over the past two decades, from 2000 to 2022. It also means that education levels don’t necessarily mean skill levels, given the co-existence of educated unemployed persons with an underqualified workforce in high-skill and medium-skill jobs.

Fifth, technology and climate change will increasingly have major implications in the various aspects of the labour market and employment. For example, artificial intelligence has created opportunities as well as major challenges.

Govt Can’t Really Address Unemployment Problem: Chief Economic Advisor

Nageswaran wondered what the government could do on the employment front “short of hiring more itself”.

New Delhi: Chief economic advisor V. Anantha Nageswaran said on Tuesday that it is incorrect to assume that the government can solve all social and economic problems, such as unemployment. Ironically, he was speaking at the launch of the “India Employment Report 2024: Youth Employment, Education and Skills” co-authored by the International Labour Organisation and The Institute for Human Development.

Nageswaran, according to The Hindu, wondered what the government could do on the employment front “short of hiring more itself”.

“In the normal world, it is the commercial sector who needs to do the hiring,” he claimed, while also pointing to moves the government had made in recent years such as the Skill India Mission.

The CEA cited the protagonist of the 1970s satirical film Mohammed bin Tughlaq to make his point: “For unemployment, he simply says, “Look, all I will do is I’ll keep talking on every dais and stage that we have to solve the unemployment problem, and that is my contribution to solving the unemployment problem. Because this is not something I can address.”

The report Nageswaran was releasing found that “Employment is dominated by poor-quality employment in the informal sector and informal employment” and “Wages and earnings are stagnant or declining”.

Writing in The Wire, economist Santosh Mehrotra had talked about how the Narendra Modi government and economists associated with it seem more intent on spinning lies about India’s job market instead of recognising and trying to solve the problems that exist.

While Nageswaran throws his hands in the air, he seems to have forgotten there is a reason people are asking the Modi government about the lack of jobs. Before he came to power in 2014, as the BJP’s prime ministerial candidate, Modi had promised one crore jobs to the youth if voted to power.

Skill India Mission: Short Courses, No Employable Skills and a Lack of Jobs

The Congress announced, as part of its manifesto for the 2024 Parliamentary elections, a Right to Apprenticeship (RA) for all post-secondary certificate/degree/diploma holders. It guarantees all the individuals under 25 years of age, a right to apprenticeship, with firms where they can be trained and work together, based on duality principles of the Germanic skilling model.

Illustration: Pariplab Chakraborty. Photo: Intifada P. Basheer and Azam Abbas

India has always had a supply-driven vocational skilling ecosystem, where youth are getting educated but not ‘skilled’ in the true sense. This calls for scrutiny of performance of few flagship schemes of government under skill development (SD) initiatives in India and underlines why reforms like RA are a step in the right direction.

Quantitative evidence related to Skill India Mission

Vocational education and training (VET) has historically been neglected in India for over half a century until the 2000s (just as school education had remained neglected in India’s planning strategy) – the costs of which we continue to pay today. In 1991, during the liberalisation of the economy, 52% or half of India’s population was illiterate and mostly concentrated on agriculture.

Although school education received a newfound emphasis in public spending in the 1990s, VET still continued to be neglected (although that was not the case for technical higher education). The 11th Five Year Plan (2007-12) was the first plan that had a chapter on skill development. As a result of this, India’s manufacturing and services workforce still have individuals with very low levels of education. Worse, hardly any worker has received formal VET.

According to the National Sample Survey Organisation Employment-Unemployment Survey (NSSO EUS) 2011-12, only 2.2% of the workforce in India had received formal VET. As per the Periodic Labour Force Survey (PLFS) data, the percentage of formally vocationally trained individuals decreased from 2.2% (10.43 million) in 2011-12 to 2% (9.14 million) in 2017-18 but rose to 3.7% (21.05 million) in 2022-23. Additionally, as per the National Scholarship Portal (NSP) 2015, only 2.7% of India’s workforce has received formal skill training, compared to 52% in the United States, 80% in Japan, and 96% in South Korea.

In the 2024 budget speech, the Union government claimed that 14 million individuals were trained under the Skill India Mission, which included upskilling and reskilling 5.4 million. But in reality, there appears to be a disconnect between the claims of the government and the ground reality.

There is also a stark disparity between these numbers and targets set in the National Policy on Skill Development and Entrepreneurship 2015, which aimed to skill 400 million workers by 2022 and remains a distant dream. Importantly, 300 million of these workers were to be given Recognition of Prior Learning (RPL) – which was required since over 95% of India’s non-farm workers acquire their skills in the unorganised sector in informal work.

But these skills are not certified, hence, not recognised.

Informal learning deserves recognition and certification so that such workers can acquire some dignity in the labour market and certificates could possibly help them make a claim for higher wages. Hence, the National Skill Development Mission (SDM) and National Policy on Skill Development and Entrepreneurship were the government’s response to the very low level of formal vocational training among the Indian workforce. SDM was implemented through schemes such as Pradhan Mantri Kaushal Vikas Yojana (PMKVY), Deen Dayal Upadhyaya Grameen Kaushalya Yojana (DDUGKY) and the National Apprenticeship Promotion Scheme (NAPS), to address employability gaps.

Also read: Bengal’s Jute Mills Run on the Labour of ‘Zero Number’ Workers

Unit level analysis of 2017-18 PLFS data stated that 22% of the total vocationally trained individuals undertook less than six-month courses, and that share has now risen to 37%. More worrying is that in 2017, 29% individuals used to take two-year or longer courses, which is now reduced to 14.29%. There is a rapid decrease in the duration of SD courses. So, overall more people are getting degrees/certificates or formal education but the duration of these courses is very short – in some cases only 10 days.

Proliferation of short-term training to project large increases in trained workers

What is the logic behind this rise in short term training (STT) in formal vocational education when, according to 2017-18 PLFS data, 96.4% of individuals in India spend less than 15 years in formal education, and that number has now decreased to 95.8%. This anomaly requires a theoretical deep dive into the skilling strategy adopted by the government.

For the flagship PMKVY, the official website data claims that 54% of the trainees are placed through this scheme. Actual data analysis shows that of the total 12,454,858 candidates assessed, 11,041,125 candidates were certified, and only 2,451,517 candidates were placed, i.e. only 22.2% were placed.

In fact, PMKVY has been Skill India Mission’s flagship programme and yet, not only is the training all short term, the placement rate shows no improvement over time: placement rate for PMKVY 1.0 (which started in 2015) is 18.4%, PMKVY 2.0 is 23.4%, and PMKVY 3.0 is 10.1%. However, the programme is still being funded — PMKVY 4 is starting this year with a budget outlay of Rs 1,200 crore approximately.

The sector-wise placement rate showed only 54% for electronics and hardware and 20% for apparel, while the placement rate of the rest of the eight sectors, namely construction, BFSI, beauty and wellness, etc., was lower than 10%. So, how these numbers add up to 54% is anybody’s guess.

Remarkably, ahead of the run up to the Lok Sabha elections the National Democratic Alliance (NDA) government has shut down its dashboards and data sources in the last month – why, we are left to guess.

The rise of these short-term skilling courses only increases the number of individuals who may possess a certificate of being skilled, but in reality, they may lack the skills to carry out a particular task efficiently due to the lack of proper training.

Due to this, there is a desperate need for quality checks of these short-term courses. These courses produce half-trained workers, and the degrees/certificates of these individuals don’t carry much value in the labour market as workers essentially don’t learn required skills through these courses. Thereby, they are not able to secure a job after completion of these training programmes. This skilling system produces half-educated and quarter-trained personnel.

Recognition of prior learning in National Skills Policy – serious issues

There has not been a single government report published analysing the efficiency and quality of STT and RPL courses under PMKVY. For these courses, the total duration can be as short as 24 hours or 3 days of training. On an average, an RPL course is for 15-day duration (usually offered by the NSDC funded private vocational training providers) where the quality of these courses — credentials of the training providers, assessment agencies’ diligence, and assessment by certification authority — is highly questionable along with numerous cases of forgery.

Apprenticeship programmes

Since 1961, India has had an Apprenticeship Act, which requires all registered firms to accept apprentices for at least one year or more. About ten years ago, 2,50,000 apprentices existed in registered non-farm enterprises.

On August 19, 2016, the government of India launched the National Apprenticeship Promotion Scheme (NAPS), which had a budget of Rs 10,000 crore. The main objective of the scheme was to promote apprenticeship training. Though the target was to train 50 lakh apprentices by 2020, only 20 lakh apprentices could be trained by 2022. Out of the envisioned Rs 10,000 crore, only around Rs 650 crore were disbursed to the states between the period of 2017 to 2022. NAPS 2 was launched in 2023, and no figures for the same are currently available.

An ILO study in 2022 concluded that the amendments in the 1961 Act have contributed to some increase in the number of apprentices in India. Out of a workforce of 570 million in 2022-23 (as per PLFS), the apprentices were just over a half million, a rise from 2.5 lakh ten years ago.

Clearly, the amendments have not worked the magic. This is not surprising, given practically the entire private corporate sector has largely ignored the apprenticeship schemes.

Only the central and state public enterprises have tended to fulfil their obligations. MSMEs still continue to ignore the scheme. The result: Germany, with a 46 million workforce has at least 6 million apprentices; India has, by contrast, half a million. The difference arises from the industry/employer involvement in pre-employment training – which makes India’s approach supply-driven, but successful VET programmes around the globe have been demand-driven.

What India’s youth need urgently, as 6 million or more join the labour force each year – and over a 100 million wait in the wings as Not in Education, Employment or Training (NEETs) – is a pathway for education of a general academic nature or vocational or technical manner. That requires the Union government to think seriously and urgently about employers/industry in the skilling process.

Also read: More Cancellations, Over 50 Lakhs Affected, Cloud Over Boards Too: The Uttar Pradesh Exam Story

The India Skills Report 2021 argues that nearly half of India’s graduates are unemployable. Open unemployment was barely 2.1% in 2012 and had already nearly tripled to 6.1% in 2018, the highest rate in 45 years of India’s labour force surveys. The total number of unemployed was one crore in 2012 before the BJP came to power – but it had tripled by 2018 to three crore.

The youth unemployment rates went through the roof for those: with middle school (class 8) education, rising from 4.5% to 13.7%; with secondary education (class 10) from 5.9% to 14.4%; and with higher secondary (class 12) education from 10.8% to 23.8%. Educated unemployment worsened sharply. For graduates, the unemployment rate rose from 19.2% to 35.8%; and for postgraduates from 21.3% to 36.2% (2022-23).

In the light of educated unemployment, lack of takers of skill programmes, low-quality training and abysmal placement rate, there is an urgent need for a comprehensive overhaul of the skill development landscape.

India, which is already suffering from high educated unemployment, in the future is moving towards the problem of skill underutilisation and over-education (or ‘degree mania’). Mere rhetoric and inflated statistics will no longer suffice.

It is imperative that the government prioritises quality over quantity, ensuring that every individual emerges from these programmes truly equipped to contribute meaningfully to the workforce. Anything less would be a disservice to the aspirations of millions seeking a better future through skill development.

Skill policies and schemes have completely failed and need a big overhaul on the lines of successful skill formation models like Swiss and Germanic skill models which are based on duality principles with youth and industry at centre stage. A Right to Apprenticeship to every youth should be an urgent priority.

Santosh Mehrotra is a Research Fellow in IZA Institute of Labour Economics, Bonn, Germany and Dr. Harshil Sharma is Programme Associate at iForest. The views expressed in the article reflect the views of the authors and not of the organisations with which they are associated.

Urban Employment Programmes: A Catalyst for Female Labour Force Participation

Urban employment programmes must go beyond being safety nets, to imbibe not just protective and preventive measures, but transformative measures that address women’s labour force participation.

In the recent years, India’s urban employment landscape has witnessed a new entrant in the form of Urban Employment Programmes (UEPs), currently implemented across nine Indian states. The latest offering – Rajasthan’s Indira Gandhi Rozgar Yojna (IRGY) – was launched in 2022 with an ambitious Rs 800-crore budget, to address issues of urban poverty, inflation and joblessness.

The scale of these problems is large, and gendered. India’s unemployment rate remains around 8-9%, yet the Periodic Labour Force Survey (PLFS) reveals that only 21.9% of women aged 15 and above in urban areas participate in the workforce, with a significant 91% employed in the informal sector.

In UEPs across India, reports note the predominance of women workers, and our research in Rajasthan suggests that over 90% of IRGY beneficiaries are women. These metrics indicate a positive movement towards gender inclusivity and empowerment. A review of UEPs across India and insights from the field in Rajasthan and Odisha help us understand what draws women to these programmes and identify best practices and learnings that can lead to a sustained increase female labour force participation.

Social contexts and household dynamics are key determinants for lower female labour force participation. UEPs provides many women a pathway to enter the labour market, hitherto unavailable due to limited employment opportunities, unpaid care responsibilities, and other limitations placed by households, such as distance to work, work timings, and the concerns about safety outside the home and neighbourhood.

UEPs address these issues by offering a structured and supportive environment for women to enter the formal labour market. For informal workers such as home-based workers, UEPs substitute exploitative labour and wages (often as low as Rs. 50 a day) with a guaranteed minimum wage. Domestic workers benefit from a single worksite, reducing time and cost spent on commuting, and facilitating better management of household tasks. Similarly, casual workers, such as those in construction, find UEPs safer and easier to access, even if wages may be slightly lower.

Also read: In Charts: How Women Continue to Shoulder the Burden of Unpaid Work

UEPs also offer a sense of safety for women, as many reported feeling safer due to the presence of other woman at the worksite. Women also found camaraderie and built stronger social networks at worksites. Ironically, these workspaces became unexpected spaces of leisure granting women a break from relentless household responsibilities. This support extended beyond the workday, with women forging friendships that helped navigate personal lives and crises. The programme also granted women a degree of autonomy by empowering them with financial resources and a role in household decision-making.

However, it is not just social contexts that make UEPs attractive. Informal work is layered with precarities, one of which is the task of finding work frequently. UEPs guarantee work (up to 125 days in Rajasthan) and often back this promise with unemployment allowances. UEPs also offer multiple avenues for workers to register for work, including camps organised by Urban Local Bodies and Civil Society Organisations, online registration, and support centres like e-mitra. The diversity of options and quick enrolment significantly reduce the barriers to entry that women face when applying for other jobs.

However, despite these benefits, UEPs, face criticism for offering lower-than-market wages, and for excessive focus on manual labour and for the quality of employment. Considering these strengths and weaknesses, we recommend several improvements for UEPs to elevate female labour force participation.

Broaden Eligibility: Access to UEPs in India are mostly restricted to residents. Not only does this leave out migrant women, who are often more vulnerable, but also long-term residents who may be considered migrants ‘on paper’ and unable to meet the eligibility criteria, enforced through requirements such as Aadhaar, ration cards, or voter ID cards. UEPs must consider non-local identification, such as Aadhaar, and ID cards generated through worker organisations or unions.

Offer Flexible Work Options: Recognising the burden of household work, UEPs can offer flexible work options, allowing women to choose shorter daily shifts of three to four hours, or condensed workweeks of two to three days. Similar employment programmes in South Africa and Argentina have offered such options. Argentina’s Plan Jefes has been effective, with nearly 70% of beneficiaries being women. Studies show improved access to social services, reduced school dropout rates, and lower levels of abuse and crime. Women also report gaining additional skills, improving their chances of obtaining other paid work.

Also read: Despite Talk of Diversity, Women Still a Minority in Indian Boardrooms

Expand the Scope of Work: UEPs must target an expanded list of work, such as building and managing economic and social infrastructure, which can include childcare facilities (creches), canteens, and multi-purpose centres (MPCCs) where women can collectivise, work, and rest. Women can also be granted work in community kitchens, and educational institutions, as well as public institutions such as Anganwaadis.

Improve Accessibility and Mobility: UEPs should provide work closer to home and within a 1-2 km radius to minimise transit time and cost. Alternatively, a transportation allowance (as practiced in Kerala) or free-to-use public transport can benefit women workers and enhance their mobility.

Prioritise Safety and Comfort: Many women prefer UEPs because they provide safe spaces for decent work. Workplace amenities must include toilets, resting spaces, drinking water, and childcare facilities. This can set a positive benchmark for private markets as well and increase women’s labour force participation.

Wages and Skilling: Typically, UEPs are aligned to minimum state wages. However, states must consider introducing the concept of living wages, which broadens the discussion on wages to include skill levels, and account for input factors such as the nature and location of work. A model such as this will additionally build a component of apprenticeship, allowing new and unskilled workers to learn from experienced workers and eventually find e permanent work.

While UEPs are a vital lifeline for many women in urban India, high uptake should not be the end goal. UEPs must go beyond being safety nets, to imbibe not just protective and preventive measures, but transformative measures that address women’s labour force participation. This will need UEPs to adopt a more innovative approach, offering better wages, an expansive set of contextualised works, greater access, as well as safety and dignity. The true measure of success lies in building upon this foundation.

Vrashali Khandelwal is a Consultant at Indian Institute for Human Settlements (IIHS) and her work revolves around issues of informality and social protection. Sukrit Nagpal is a researcher and practitioner at IIHS and his work focuses on urban housing and informal work.

Stagnant Job Rate, Worse for the Educated: IIM Study

A study by IIM, BITS (Pilani) and Ministry of Agriculture and Farmers Welfare finds that India is not generating enough jobs. The gender disparity is sticky and while there is a jobs crisis also for unskilled labour, proportionately there are far fewer jobs for the better educated.

New Delhi: Researchers from Indian Institute of Management, IIM Lucknow, in collaboration with Birla Institute of Technology and Science (BITS) Pilani and the Union Ministry for Agriculture and Farmers Welfare, have found “a stagnating employment growth rate, weakening employment elasticity, slow structural transformation” as per The Hindu, which has reported on their findings published in the Indian Journal of Labour Economics.

“Jobless growth”

The researchers have used data from the National Sample Survey Office (NSSO) Employment and Unemployment Survey and the Periodic Labour Force Survey. The have concluded that there was a surge in output growth and employment between 1987–88 and 2004–05, followed by ‘jobless growth’ from 2004–05 to 2018–19 and a very small “rebound” thereafter.

“Apparently, economic growth, rather than creating more jobs, has resulted in net labour displacement. Alongside the number of jobs created, it is equally important to examine the quality and decency of jobs,” Professor S. Tripati Rao of IIM, Lucknow is quoted as saying. In 2020–21, the total labour force in India was at 556.1 million. Of this a majority or 54.9% were self-employed, just 22.8% in regular employment and an 22.3% in casual employment.

The Wire had reported on May 2, 2023 on the crisis in jobs as well as the quality of jobs. Mahesh Vyas of CMIE had told The Wire that the quality of jobs in India is very low. “Most jobs pay poorly and are of informal arrangements in the unorganised sectors.”

India’s job data has been patchy and not revealed regularly of late. There are also serious questions about what it captures and is it reflects employment precarity at all. OECD uses three “objective and measurable dimensions” to help quantify the quality of jobs, which Indian data still does not do. The three criteria are, earnings quality, which “captures the extent to which earnings contribute to workers’ well-being in terms of average earnings and their distribution across the workforce.” The labour market security and the quality of the working environment are the other two criteria.

Gender disparity worsens?

The IIM/BITS/Ministry of Agriculture study has also found gender-based disparity in the Labour Force Participation Rate (LFPR) in rural and urban areas continues and worryingly, the decline of LFPR is higher for females than for males from 1983 to 2020–21. “The overall female Work Force Participation Rate (WFPR) for those aged 15–59 in 2020–21 stood at 32.46%, a full 44.55 percentage points below that of men. Further, the total percentage of male WFPR (81.10%) in the same year for aged 15–59 years is more than twice the rate for female adults (33.79%),” the study says.

Unemployment much higher for highly educated Indians

The Government of India has been helping mediate between foreign governments like in Taiwan and more controversially in Israel, for providing semi-skilled and unskilled labour to those countries, signalling its inability to provide jobs in basic manufacturing industries in the country. An MoU with Taiwan in this respect was signed on February 16, 2024. The jobs crisis in India, as per the BBC’s report last month, has been “driving workers to Israel,” and even before the war on Gaza, Israel, and India had “signed an agreement in May 2023 that would send 42,000 Indian construction and nursing workers to Israel,” according to comments by former Israeli foreign minister Eli Cohen in the Israeli Knesset, as per Mint.

But prospects for employment do not improve with rising education levels and progressively get worse, also as per this study, suggesting a comprehensive failure to generate jobs across the board in India.

The unemployment rate in India rises with education levels. The unemployment rate “for the illiterate and less educated class (below primary) was 0.57% and 1.13% respectively while, for the highly educated class (graduates and above), it was 14.73% in 2020–21 for the age group 15–29 years.” This pattern can be seen across the years, as per the analysis.

The study recommends more attention to MNREGA, other poverty alleviation programmes and public works. It finds MNREGA to positively help with “raising wages in rural areas by 5%, increase in Labour Force Participation among female workers, improvement in low-caste working bargaining power, increasing rural wage levels, and fall in reliance on high-caste employers.”

Survey Finds Deep Economic Discontent, Job Pessimism; 52% Say Modi’s Policies Favour ‘Big Business’

The first ‘Mood of the Nation’ poll of 2024 rings alarm bells on deep economic anxiety. This is borne out by the latest RBI consumer confidence survey.

The first thing to note in the first ‘Mood of the Nation’ poll of 2024 is a majority of those surveyed – 64%, “a substantial number of people” – report that their economic situation has deteriorated or remained the same in the past decade, under the Modi government’s seamless regime with a clear majority. Over one-third, 35%, say their situation has got worse relative to what what it was in 2014. This is one apiece with RBI’s consumer confidence surveys, which have been noting the despondent mood amongst those surveyed through the Modi government’s second term, starting from 2019, well before the pandemic.

The India Today Mood of the Nation poll, which brings out the economic discontent and restlessness vividly, was conducted by CVoter. The survey has 35,801 respondents, reached out through computer assisted telephone interviews (CATI) between December 15, 2023 and January 28, 2024, with the interviews covering all Lok Sabha segments across all states.

Unemployment “serious”: 71%

On unemployment, 71% say the situation is either “very serious” or “serious”. A whopping 54% of those surveyed say the jobs situation is “very serious”. Objective data on the state of unemployment, despite government denials, has pointed to a sad state of affairs, leading to even a controversial withholding of employment data five years ago, with the government agreeing to release the bad news only after the 2019 general elections were over. This led to two resignations from the National Statistical Commission.

The quality of jobs has also been a point of distress, with formal employment going down. State jobs or “bhartis” have been postponed for years on end with an entire generation preparing for ‘competitive examinations’ feeling left out and out of a job. The Armed Forces deciding to move towards an ‘Agniveer’ model of hiring soldiers, or short-term contract soldiering wholly replacing the idea of a soldier as a job providing respect, regular income and purpose has hit avenues for jobs for youngsters, with consequences in a demographic where the median age in India is around 30 years. Statista, (as there has been no Census since 2011) says it was a median of 32.4 years old in 2020, meaning that half the population is older than that, and the other half younger. Lower median ages need more job making. This figure was lowest in 1970, at 17.3 years, by the way.

“Current Household Expenses” out of whack

“Current household expenses are difficult to manage”, and this worries 62% of those surveyed. If you add those who worry about raised expenses but still say it is manageable (33%), this makes price rise a concern for 95% of those surveyed. This is the highest metric number logged for any question across the survey. A total of 66% say they don’t think their household incomes will rise. 30% feel it will deteriorate. Price inflation is the biggest failure of the Modi government, says 26% of the cohort surveyed.

As far as real numbers go, prices have been astronomical, and been well out of the RBI band of acceptable rates (between 4 to 6%) for some time now. In latest figures in for January, food inflation is still high, at 8.3% compared with 9.5% in December 2023. The retail inflation is at 5.1% in January, but has been hovering well above that; it was 5.7% a month earlier. For urban India, food inflation is at 9%. It was at 10.4% in December.

RBI’s consumer confidence surveys bear out the anxiety among households over inflation. The latest data, released on February 8, records that “majority of survey participants expect a rise in price and inflationary pressures especially for food product category for the three months horizon”. They say that “median inflation expectation for the three months ahead increased by 10 bps and stood at 9.2 per cent.”

RBI’s Michael Debabrata Patra had said in December 2023 that “inflation remains highly vulnerable to food price spikes, as the spurt in momentum in daily data on key food items for the month of November and early December reveal”. He emphasised that “households are already wary: although they expect inflation to remain unchanged three months ahead, they are more unsure about this prognosis than they were two months ago. Over the year ahead, however, they are more sure than in the past that inflation will likely rise.” Patra added, that “consumers too reveal more pessimism about inflation a year ahead than when they were surveyed in September”.

People say policies promote K-shaped growth

The survey brings out the belief in the past ten years that economic policies are being drawn up to help big business. A majority of people surveyed, 52%, say so. Only 9% think economic policies are benefitting farmers, 11% are of the view they support small business and only 8% say they benefit the salaried class.

The Modi government’s economic policies have ended up widening the gap between the rich and the poor, is the feeling of nearly half of those surveyed. About 45% feel that the gap has got wider.

An analysis by India Ratings and Research for FY22 and FY23, cited by India Today, “shows that wages for lower-income groups, comprising agricultural rural workers and unskilled workers, saw degrowth or negligible wage growth, if at all. In contrast, wages for corporates, representing the top 50 per cent of the income bracket, increased by over 10 per cent in the past two years.” The political landscape has been dominated by conversation over one business house, the Adani Group’s rapid growth, which continued also through the pandemic, far outstripping the rate of growth in India and also growth of its peers in the business community.

Big corporations as a group have benefitted from Union government’s policies, says a look at taxes paid by them, as compared to what individuals pay. The government has been boasting about this. The government data, as released by the Central Board of Direct Taxes, or CBDT says that the number of tax payers filing income tax returns has more than doubled to 7.78 crore in the past 10 years. But this ‘data’ conceals a bigger story that has implications on economic equality statistics.

It is only thrice since the 1990s that individuals have paid more than corporations as tax. The first was in 1991-92, then in 2020-21 and now. Economic commentator Vivek Kaul cites aggregate data of 35,000 companies sourced from the Centre for Monitoring Indian Economy (CMIE) which “suggests that profit-before-tax (PBT) of these companies went up 144% between 2018-19 and 2021-22. Plus, the tax provisions went up just 39%, helping push up profit-after-tax (PAT) by 244%.” The government had cut corporate tax rate in September 2019.

He also points out to how this inhibits private consumption growth in 2023-24, which is expected to be 4.4%, the slowest since 2002-03, except for the pandemic year. As private consumption forms 57% of the Indian economy, the government could have slashed personal income tax rates in the interim budget, and encouraged people to spend more and drive consumption. But with the fall in corporate tax collections, it cannot do that. There is a huge and continued cess on petrol and fuel, despite a long span when oil prices were at record low levels, as none of the benefits were passed on to consumers. This is also an indirect, regressive tax, hurting those at the lower end of the income scale more acutely.

Going by the ‘Mood of the Nation’, the people have caught on to how policies are hurting those at the bottom of the scale disproportionately.

The Chief Economic Advisor, V. Anantha Nageswaran says today in a piece in Mint, “By May, we will have learnt that India’s economy has grown by more than 7% annually in real terms over the last three years.”

Israeli Recruiters Keep Mum on Job Conditions as Indian Workers Rush to Apply

“There is no bigger risk than poverty,” one of the aspiring workers said.

Lucknow: A large crowd of labourers having been queuing up every morning at the Industrial Training Institute (ITI), Lucknow, trying their hand at the recruitment drive for Indian workers willing to go to Israel.

These drives have been organised ever since Israel suspended the work permits of thousands of Palestinians after October 7, leading to a shortage of workers. In India, workers have been expressing immense interest in these jobs despite the perceived security risks. The labour union All India Trade Union Congress (AITUC) views this hiring campaign as a failure of the Narendra Modi-led Union government’s promise of generating two crore jobs per year. Opposition parties have also criticised the move, saying it involves dangers for the workers.

Interestingly, the Israelis want to keep this recruitment drive opaque, while their Indian counterparts are disseminating the effort through district labourer offices, social media, advertisements, etc. to encourage more and more labourers to participate.

Labourers from different parts of the nation, skilled in shuttering, iron bending, ceramic tiling or plastering, are applying. The Uttar Pradesh government released advertisements for 10,000 jobs in Israel: 3,000 vacancies for a shuttering carpenter, 3,000 for iron bending, 2,000 for ceramic tiling, and 2,000 for plastering.

The Israeli government agency Population, Immigration, and Border Authority (PIBA) is offering a salary of between Rs 1,36,000 and Rs 1,37,000 per month to these labourers. The PIBA recruitment drive is being felicitated by the National Skills Development Corporation (NSDC).

The Ministry of Finance established the NSDC as a not-for-profit public limited company using a public-private partnership (PPP) model. The Government of India, through the Ministry of Skill Development and Entrepreneurship (MSDE), holds 49% of the share capital of NSDC.

The Wire talked with some aspirants who came to ITI Lucknow to appear in the ongoing recruitment process for Israeli jobs. Pushpendra Kumar, a photographer from Sambhal district, was disappointed as the bank rejected his application for a loan to buy camera lenses.

Subsequently, he learned about Israeli jobs through the newspaper; he went to the local labour office and registered his name there. Kumar said that he was sent to take part in the recruitment drive by the labour department.

“Yes, I am putting my life in danger to earn money for my children’s future. I am well aware of the ongoing conflict between Palestine and Israel,” Kumar said. “If a bank approves my small genuine loan, why do I intend to leave my kids alone at home and go to a war-torn nation?”

The recruitment drive at ITI Lucknow. Photo: Asad Rizvi

Simran Deep Singh, residing in Punjab, came to Lucknow to try to go to Israel to work as a construction labourer. Despite being aware of the conflict, Singh, who passed the metric exam, said he wishes to travel to Israel because he could not find employment in India.

Another job aspirant, Deepak Kumar, said that he comes from a low-income household in the Jalaun district, where his father works as a labourer and makes bricks. “I prefer to live in a red zone rather than live jobless at home,” he said, adding that “Rs 1.36 lakh is a big offer for me who has no work here.”

He went on to say, “I decided to go there to earn money because, despite my best efforts, I was unable to find any work here so far. Whenever I return home from Israel, I will use my savings to launch my own business in my hometown.”

Ashish Mishra spoke to The Wire while returning to his home in Azamgarh after appearing for an interview for a carpenter’s position. He said, “It is difficult to live with jobs that pay only Rs 8,000-10,000 (per month) here at a time when inflation is very high.”

“I’m not sure when the interview results will be announced,” Mishra ssaid. However, he was confident about getting work in Israel, although he was also unaware of the terms and conditions of the job, like the other aspirants. According to him, nobody told them about it.

“I know that there is a risk to life there in Israel, but there is no bigger risk than poverty,” said Satish Kumar Yadav, a carpenter who had earlier worked in Qatar. Yadav returned from Qatar in July last year, where he was earning more than Rs 25,000 per month. But since coming back from there, he has been jobless so far.

Meanwhile, the opposition Congress attacked the Modi government and said the recruitment drives for jobs in war-hit Israel reflect that the country is passing through a time of massive unemployment and poverty, the same as seen in the pre-independence era, forcing labourers to look for job openings in red zones.

The Modi government was also criticised by the Congress’s UP unit for its discrimination based on economic status. “Why is the Modi government sending poor nationals to work today when it evacuated Indian citizens from Israel during the war a few months ago through “Operation Ajay”? No government should discriminate against people based on their economic situation. We want the hiring process to be immediately stopped,” Congress leader Shahnawaz Alam said.

Alam, who is also a part of the Congress’s minority cell, said that in a prolonged conflict scenario, the proposal to send labourers would bring shame and establish the fact that the BJP government made the country poor and weak. The Congress also sent memoranda to governors via district authorities to stop the drive.

The recruitment drive at ITI Lucknow. Photo: Asad Rizvi

Chander Shekhar, UP state general secretary of the All India Trade Union Congress (AITUC), said this recruitment operation during the war was suspicious and also highlighted the inflation and unemployment prevalent in the country. He also said that the government was overlooking the security of migrant labourers.

Mazhar Azeez Khan, placement officer at ITI, told The Wire that on January 23, a total of 528 students appeared for screening, of whom 365 passed the test. This figure increased on January 24, when 795 candidates appeared in the test and 531 emerged successful. Similarly, on January 25, the number of candidates appearing climbed to 1,023, out of which 799 passed.

Raj Kumar Yadav, principal of ITI Lucknow, said that the authorities in Israel and India both support the recruitment drive. Yadav also said they were facilitating recruiters from Israel looking for 10,000 skilled construction workers who could earn a respectable salary per month.

Yadav also told The Wire that Israelis will give visas to selected aspirants and take them on a chartered plane. He expressed hope that “10,000 families will be fed well and will grow”. The Israeli recruitment team refused to speak to The Wire or answer any questions about the drive, the terms and conditions of the jobs, or anything else.