Contrary to popular belief, the Modi Government has not failed to deliver on job creation. It’s just that we need to get reconciled to the idea of self-employment
Prime Minister Modi (allegedly) failed on his pledge to create around 20 million jobs annually. To demonstrate the point, critics have often point to hundreds and thousands of youth submitting applications for a few vacancies of peon/clerk in Government offices. They cite this yawning gap as an indicator of joblessness in the country. The underlying assumption behind this inference is that all those youths who applied for the available vacancies do not have any work at hand or any source of income. Such an assumption is fallacious. Had it been so — millions of youth without any income source — there would have been anarchy in the country.
The reality is that these millions of seemingly unemployed people have a regular stream of income that comes from ‘informal’ activities such as farming, animal husbandry, plumber, electrician, gardener, street vendor among others. But these are not respectable professions. It is also true that a Government job, even if it happens to be of a peon, is considered respectable. When viewed in conjunction with the fact that such jobs are for a lifetime, and carries with it a good salary besides perks, makes people tilt towards such jobs. The result is that too many people chase too few jobs. The youth have work as also a source of income, yet they are jobless.
The problem is not with the lack of income earning opportunities per se. It has more to do with people’s mindset about the profession the youth choose. If only the society develops a positive attitude towards such occupations, there will be balance between the number of aspirants and available opportunities. That is the right way to go about.
This is precisely what Prime Minister Modi is endeavouring to do. He has inculcated a sense of pride and respectability to such professions which gets reflected in his speeches and interviews, besides direct interface with the people vide his monthly Mann ki Baat programme. Modi’s promise of 20 million jobs annually needs to be viewed in this perspective. His focus is primarily on enabling a person to set his/her own business so that he/she not only creates a work opportunity for himself/herself but also becomes a job provider.
launched in 2015, the Pradhan Mantri Mudrayojna has become a harbinger of creating jobs. Under this scheme, loans are provided to individuals engaged in small businesses under three categories viz Shishu, up to Rs 50,000; Kishore, Rs 500,000; and Tarun Rs 1000,000 without insisting on any guarantee or mortgage. Till date, 120 million persons have received loans valued at Rs 600,000 crore. Seventy five per cent of these loans have been given to women. Their loan servicing record is also much better. No wonder, non-performing assets under this scheme is just about 3.4 per cent which is much lower than the 10 per cent norm.
Of the total loanees, 30 million are borrowers setting up a new business. Even if a borrower employs one person at the bare minimum, this would mean creation of 60 million jobs. Of the remaining 90 million who have taken loans for supporting and expanding existing business, even if one-third provides job to one person each to support their augmented business, this would yield another 30 million. This takes the total to 90 million.
If only one gets reconciled to the idea of creating jobs through self-employment, Modi’s promise of creating 20 million jobs per annum or 80 million jobs in four years would have been accomplished. That apart, GDP growth during the last four years was fairly high in 2014-15: 7.4 per cent; 2015-16: 8.2 per cent; 2016-17: 7.1 per cent; 2017-18: 6.7 per cent. Growth during the last two years was significant despite demonetisation and GST. It is evident even to a man on the street that when there is growth it cannot be without men working on projects.
Since 2014, the Government has massively invested in infrastructure, both physical and social viz highways, roads, rails, expressways, ports, waterways, schools, hospitals, homes, toilets etc. It has also been galvanising the private sector to invest by improving the ease of doing business. This has led to job creation, including substantial accretion in the formal sector.
As per the Employee Provident Fund Organization data, a fairly good proxy for employment in the formal sector, during the last two years, the addition of jobs was 11.5 million (4.5 million in 2016-17 and 7 million in 2017-18). This is significant, though it cannot match the scale of job creation through self-employment. Undoubtedly, the present dispensation is on track giving impetus to growth and creating ample job opportunities. Yet, attempts to trivialise job creation through self-employment such as a vendor selling pakoda sets a dangerous precedent.
This will dissuade the youth from taking up these occupations in the hope of getting so-called white/blue collar jobs which cannot be created on the required scale — even if the economy grows consistently at double digit. This imbalance could be a trigger for the ‘demographic dividend’ — a euphoric term for nearly two-third of the population falling in 18-35 age group — turning into a ‘demographic disaster’. The only way to avert it is for the 1.3 billion people of India to ensure that Modi remains at the helm, come 2019.
(The writer is a freelance journalist)
