Growth, but it’s jobless

Jaswant was not loathe to accept the congratulations. He even opened a part of one closed eyelid. But when asked about all else, in particular employment, went back to his expression of pained discontent. When it came to the reply to the debate, he refused to comment on the germane issue raised of how the net increase in employment of 84 lakh last year claimed by the prime minister could be reconciled with the much lower trends in employment growth over the last several years.

The next day, Jaswant Singh confessed, in a written reply to a starred question, that the Indian “work force”, that is, the number of those in gainful employment, had risen from 374 million to 397 million between 1993 and 2000, that is, an increase of 23 million in seven years, giving an annual average increase of about 30 lakh per year. How can an annual average increase in net employment of about 30 lakh a year till the start of the millennium suddenly transform itself into a three-fold jump over the next three years? Especially when the net increase of 54 lakh more than the earlier annual average is claimed for a year of exceptionally poor economic performance? GDP grew by only 4.3 per cent in 2002-2003, the worst the economy has performed since 1991-92. Is it not extraordinary that when the economy was growing at plus seven per cent in three of the seven years, 1993-2000, including one (1996-97) when we nearly hit eight per cent, the net increase in the country’s work force averages 30 lakh, and when growth collapses, first to 4.4 per cent in 2000-2001 and then to 4.3 per cent in 2002-2003, the prime minister suddenly sees visions of hordes of young men and women — no less than 54 lakh more of them — getting additional employment? Jaswant Singh refused to answer, or perhaps was just too bored to answer. But while the prime minister sees visions, the hard face of unemployment is that in a recent drive to recruit khalasis — the lowest category of railway employees — as against advertised vacancies for 20,000 manual labourers, the number of valid applications exceeded 55 lakh! The applicants included graduates, engineers and qualified doctors! The “Top Priority” of the NDA, said its Agenda for Governance (1998) was “Berozgari Hatao”, a slogan repeated in the NDA’s 1999 election manifesto. It is in this context that the promise was made of “one crore jobs a year”. But the slogan now seems changed, as Praful Bidwai (to whom I owe my information on the khalasis) has remarked, to, “Let them eat growth.”

This just will not do. The fact is that the 1993-2000 employment survey which Jaswant Singh invoked has also reported that over the past several decades, there has been an obverse relationship between GDP growth rates and the rate of growth of employment. Employment grew faster during the years of the ‘Hindu’ rate of growth than it has grown as the growth trajectory was raised from 3.5 per cent in the seventies to an annual average of nearing 6 per cent over the quarter century from 1980 to the present. At the top end of the spectrum, our young professionals in IT and higher management are much in demand, both here and abroad, and are earning astronomical incomes, but at the other end of the spectrum there is some relief from destitution but a sharp worsening in the prospects of gainful employment for unorganised labour (which makes up 93 per cent of our work force). The threatened labour reforms will virtually wipe out job security for most of the seven per cent who constitute organised labour. Self-employment is growing in some trades and professions but the collapse in the handlooms sector under the NDA signals a collapse in off-farm, off-season rural employment. Hence the mad rush to metropolitan centres — running at a lakh of persons a month into Delhi alone, says the chief minister.

Tragically, capital-intensive investment has not impacted on the capital:output ratio of the economy as a whole; we have, therefore, had few productivity gains. Neither privatisation nor globalisation appears to be the magic answer, because employment in the organised private sector (domestic and multinational) is currently growing at a minuscule 0.1 per cent per annum. So says the government’s latest Economic Survey. Moreover, the 1993-2000 employment survey also says that notional job loss — that is, job loss on account of the slowing of employment growth rates — is running at nearly 84 lakh a year. If we are losing jobs at the rate of 84 lakh a year, where is the prime minister discovering a net addition of 84 lakh a year? Instead of answering, Jaswant Singh yawns. Perhaps he thinks he can sleep his way to the top job like the ever-drowsy Deve Gowda!