No achhe din for job seekers

The most important factor responsible for the waning popularity and rising problems of the Narendra Modi government is its inability to generate jobs. It is true that the ruling dispensation is seized of the matter, but the response is rather tentative and routine.

The unemployment problem is huge—and growing. The latest Asia-Pacific Human Development Report has pointed out that between 1991 and 2013 only 140 million people out of the 300 million entrants into labor market got jobs. It doesn’t paint a very rosy picture about the future, something that is perhaps corroborated by the official data. Job creation in eight primary sectors dipped to a seven-year low in 2015. The eight sectors—textiles, leather, metals, automobiles, gems and jewelry, transport, information technology, and handloom—generated 135,000 jobs last calendar year, which was less than one-third of 421,000 jobs added in 2014.

In short, jobless growth, the biggest failure of the 10 years of the United Progressive Alliance government, persists. This is curious, for the National Democratic Alliance has prided itself on its excellent employment expansion record. During 1998-2004, as many as 60 million jobs were created—that is, in six years almost 43 per cent of the total created between 1991 and 2004.

Of course, two years is too small a period to judge a government for its competence in employment generation. Exports are shrinking; the policy mess bequeathed by the UPA can neither be wished away nor undone any time soon. But the NDA regime under Modi is yet to charter its own course; indeed, the grand helmsman is yet to find a functional compass to steer the ship out of troubled waters. So, it is a case of preparation for journey rather than work in progress. To date.

Again, to be fair to the Modi government, one has to mention that it has tried a lot to improve the situation. It has introduced a variety of measures to simplify procedures, cut the red tape, and blow up bureaucratic bottlenecks; the initiatives have borne fruit, as evidenced in India’s rise in the ease-of-doing-business index. Further, the government has announced direct fiscal measures for employment generation for its Stand-Up and Start-Up programmes.

Yet, it is a case of tool little, too late. All efforts have been piecemeal, a consequence of the ‘incrementalism’ dogma that Finance Minister Arun Jaitley has undermined economic policy with. Further, he has failed to rein in tax officials who keep chafing and fretting businessmen.

Jaitley has also continued with the policy of heavy taxation on the middle class, despite the fact that it is his party’s main constituency. The adverse effects are not just electoral but also economic: with little money left in their pockets middle class people are not buying many goods and services, thus dampening domestic demand. This lowers the investing spirit of businessmen. To make matters worse, the global trade is declining.

The government has also failed to insulate industry from sudden jolts, regulatory arbitrariness, and judicial overreach. For instance, it doesn’t amuse investors when they find that courts ban the sale of diesel vehicles.

Instead of addressing such issues, the government is busy in organizing glitzy Make in India functions and talk shops. At a recent function, it came up with a document called Transforming India. Regarding job creation, it has such pearls of wisdom as incentivizing employment, ecosystem to promote self-employment, micro-enterprises and manufacturing, sector-specific policy interventions, and bridging skill gaps. As if a hundred government documents like Economic Survey and the erstwhile Planning Commission reports didn’t recommend similar measures.

It is time the Modi government got real and took some real steps. Otherwise, the agitations like those of Gujarat’s Patels and Haryana’s Gujjars will continue to simmer, permanently precluding achhe din.