January 29, 2022
Hello and welcome to All Indians Matter. I am Ashraf Engineer.
India has crucial state elections coming up. Five states – Uttar Pradesh, Punjab, Goa, Manipur and Uttarakhand – will hold their Assembly elections just weeks from now. Last week, we discussed the national joblessness numbers, but what does unemployment look like in these poll-bound states? Given our large population and the rate at which we’re adding young people to the potential workforce, are these states keeping up? This is the concluding part of the All Indians Matter series, ‘Where are the jobs?’
An analysis of unemployment data compiled by the Centre for Monitoring Indian Economy shows that each of the four states scheduled to hold Assembly polls soon — Uttar Pradesh, Punjab, Goa, and Uttarakhand — had fewer employed people at the end of December 2021 than five years ago. In other words, unemployment rose significantly. There was no data for Manipur, the other state that has elections coming up soon.
Let’s look at the big one first – Uttar Pradesh. While its total working age population rose to 17.07 crore from 14.95 crore in five years, the number of people with jobs shrunk by more than 16 lakh.
Similarly, in Punjab, more than 98.37 lakh of its 2.33 crore working age population were employed five years ago. Today, the number of people employed is 95.16 lakh, or 3.21 lakh less, despite the working age population growing to 2.58 crore.
Goa has done very badly too. It saw the largest erosion of employment in percentage terms over the past five years – from roughly 50% in December 2016 to under 32% in December 2021. Simply put, half the working age population was employed five years ago but only a third has jobs now.
The northern state of Uttarakhand saw a curious mirroring of numbers. The number of employed people shrunk by 14% while its working age population increased by the same proportion. So, the number of employed persons fell by 4.41 lakh to 27.82 lakh while its working age population rose to 91 lakh. The employment rate in the state fell to 30.43% in December 2021 compared to 40.1% in December 2016.
All four states, incidentally, fare poorly compared to the national average when it comes to the employment rate or labour force participation. The labour force participation rate is the section of the working population in the age group of 16 to 64 currently employed or seeking employment.
Between December 2016 and December 2021, India’s labour force participation rate fell from 46% to 40%, and the employment rate from 43% to 37%. This means that, while India’s working-age population rose from 96 crore to 108 crore, the number of employed persons shrunk from 40.89 crore to 40.6 crore. And, as I said in the previous part of this series, the decline was being witnessed from before the COVID-19 pandemic struck.
You’d be hard-pressed to find an analyst who’s surprised by the bad news. India has been slowing down since 2016, the speedbreakers coming in the form of economic mismanagement, decisions like demonetisation and bad execution such as the Goods and Services Tax rollout.
The COVID-19 pandemic was very badly managed too. Vaccine availability was bungled and a harsh lockdown imposed with just a few hours’ notice. Suddenly, millions found themselves unemployed and marooned. With no means of sustenance and all modes of travel shut, millions walked back to their villages, many hundreds of kilometres away. Many perished.
The country continues to suffer from these missteps.
Here’s a reality check: India needs to create 100 million new jobs by 2030, it’s the primary task of the government and its biggest challenge.
The question is: what can be done now?
Here’s some food for thought:
- Promote entrepreneurship, but for that you need to improve the business climate, reduce regulation, lower taxes and build better infrastructure. There is evidence that investments in human and physical infrastructure are the most important factors. Districts that have improved this infrastructure have grown faster on the entrepreneurship and employment front.
- The answer is clear: we have to increase the pace of entrepreneurship. However, it’s tough to do that unless we do better on human indicators like education, skills, life expectancy and health. In fact, our learning outcomes and health indicators have shown little improvement over the years. So, we need better investment in and execution on these fronts. Also, setting up more educational institutions and strengthening existing ones will create a large number of jobs.
- While China established itself as the world’s manufacturing hub, India made a mark in services. The service sector has the potential for huge job creation. Healthcare is one such sector. So, due to its cost advantage, India can focus on exporting healthcare services.
But, what India needs to do has been clear for long. It’s the will to do it and the quality of execution that has been lacking.
How will all this affect voting across the five states going to the polls? Given the job distress, it’s logical to assume that unemployment will be a key issue. It affects you at a deeply personal level, of course, and your vote is one way of demanding accountability.
With this, we conclude the two-part ‘Where are the jobs?’ series.
Thank you all for listening. Please visit allindiansmatter.in for more columns and audio podcasts. You can follow me on Twitter at @AshrafEngineer and @AllIndiansCount. Search for the All Indians Matter page on Facebook. On Instagram, the handle is @AllIndiansMatter. Email me at email@example.com. Catch you again soon.