Job situation turned gloomiest in May, Centre not doing enough

Recently the Narendra Modi government announced the Central government would recruit a million people within 18 months. While this sounded big, given the extent of unemployment prevalent in the country as reflected by recent reports, it was too small a step that came too late. Unless the centre can come out with some out of box ideas soon, the situation will become dangerous.

According to the experts of Centre for Monitoring Indian Economy (CMIE), India’s employment fell by a huge 13 million in May this year from 404 million to 390 million. This is too much worrying, for this is happening in post-lockdown India. Supposedly, this was the biggest fall in employment after the pandemic was tamed last year. Experts however are of the opinion that employment in June was at the lowest point in the last 12 months.

Government will come out with its statistics later. But evidently the inflationary pressure and low demand situation ( both because people do not have money and are trying to save whatever they have for the future) is taking a heavy toll on the industrial sector, and consequently the employment situation is turning worse day by day. With little chance of relief from the inflationary pressure, the situation may turn worse.

In turn, it will affect the demand side, while further shrinkage of demand will affect the industries further, prompting them to go for further retrenchment. Thus it may take the shape of a vicious cycle.

CMIE earlier (last December) reported that salaried workers accounted for only 19 percent of all employed persons 2020-21. The figure stood at 21.2 percent in the previous year. That means about 9.5 million salaried jobs were lost last year.

From last December to now, in post-lockdown days when Covid-19 has become much less life-threatening, a plethora of jobs have been created in sectors like construction, agriculture and so on. These jobs can be categorised as not-so-lucrative ones. But, many experts assumed these were signs of recovery.

Just six month later, the process has lost steam, as indicated by recent statistics. The immediate reason for this slowdown in employment is retrenchment by the private sector that is not investing money in new projects, fearing the low-demand scenario will continue. The cost of borrowing from the banks has gone up too, discouraging the private investors to borrow.

Over and above these blues, it has been pointed out that the private sector, the engine of growth for the last three decades, now pays much less compensation compared to government jobs. Experts have pointed out that the 10/12 pass-outs working in the public sectors earn INR 25,000 per month on an average, while the same for private sector stands at about INR 12,000 per month. For people with all levels of education, according to Periodic Labour Force Participation (PLFP) data (2019-20), the monthly average salary is INR 28,000, while the same in private sector is INR 17,000.

Not only that, experts have brought to fore some other relevant statistics that show the public sector jobs are shrinking over the years. The statistics on new recruitments is a pointer to that. The Central government recruited nearly 119,000 people for permanent jobs in 2020, but the numbers came down to 87,423 in 2021. As far the state governments are concerned, all of them together recruited 496,052 in 2020, but the figure came down to 389,052 persons in 2021.

If we keep in mind that two-thirds of Indians are of working age now, and millions are joining the job market every month, a million jobs in 18 months announced by the PM will not matter much. It is evident enough from our recent experiences. We had seen how the youth burst out in rage when the Agnipath scheme was announced. Along with that we had reports of record 15 million qualified youths applying for a few thousand D category jobs in Railways recently.

However, it seems at the moment the government is clueless about the situation, and that is real bad news during the time when India is supposed to be on the recovery track. – INDIA NEWS STREAM