UNEMPLOYMENT ISSUE: Modi‘s Unmet Promise and the Path Ahead!

DILIP DAIMARY

In May 2014, Narendra Modi rose to the position of Prime Minister of India after a vigorous and highly energetic election campaign that promised to transform India’s economic landscape.

Positioned as a beacon of hope for the future, Modi pledged to catalyze an era of unparalleled prosperity and to generate a plethora of employment opportunities for India’s rapidly expanding young population.

With the backdrop of an economy that needed to accommodate over 12 million new job seekers each year, the electorate’s expectations for significant employment generation were exceedingly high.

To turn these aspirations into reality, the Modi government launched several high-profile initiatives. ‘Make in India‘ was designed to transform the nation into a global manufacturing hub, encouraging both multinational and domestic companies to manufacture their products within the country.

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‘Digital India’ was conceived to ensure that government services were made available to citizens electronically by improving online infrastructure and by increasing internet connectivity.

‘Skill India’ aimed to train over 400 million people in India in different skills by 2022.

These initiatives were positioned as strategic moves to empower the youth with the necessary skills, attract investment, and foster innovation, all of which were expected to cumulatively create millions of new jobs. The government’s agenda was to not only create employment but also to usher in a new age of economic modernization, leveraging technology and innovation.

However, as the years passed, critics and many of the youth who had once been hopeful began to express disillusionment. The promises of extensive job creation seemed to be unmet, with reports highlighting a mismatch between the number of jobs being created and the number of individuals entering the job market.

Moreover, the government’s controversial decision to implement demonetization in 2016, which invalidated 86% of the currency in circulation, was met with widespread criticism. Instead of boosting the economy, demonetization was blamed for causing immediate disruption to the livelihoods of millions and for slowing down economic growth.

Critics argued that the promise to create 20 million jobs for India’s unemployed youth annually had not been fulfilled, and the ambitious claims made by the Modi administration were increasingly being viewed as overly optimistic or hollow promises. The reality of job creation under Modi’s tenure became a subject of intense debate and scrutiny, with many pointing out that the actual employment growth was far from the transformational change that had been promised.

The conversation about Modi’s job creation record remains a contentious one, with assessments varying widely depending on the source and the metrics used to evaluate employment growth.

The informal sector, embodying a significant chunk of the Indian workforce, was severely impacted by policy decisions such as demonetization and the abrupt introduction of the Goods and Services Tax (GST). Small and medium-sized enterprises (SMEs), crucial for job creation, have encountered barriers including limited access to credit and market linkages.

Moreover, the advent of automation and artificial intelligence looms as a potential threat to traditional labor-intensive roles, necessitating a shift towards new skill sets.

The numbers provide a stark narrative. The Periodic Labour Force Survey (PLFS) by the National Statistical Office (NSO) reported that in 2017-18, India’s unemployment rate reached a 45-year high. Although there has been some improvement, the World Bank has estimated that the COVID-19 pandemic could plunge 40 million Indians into extreme poverty.

The government’s commitment to data transparency and the timely release of employment statistics is crucial for accurately diagnosing and responding to job market challenges.

The government led by Prime Minister Narendra Modi had set an ambitious target to generate 20 million jobs each year to address the unemployment challenges faced by India’s burgeoning youth population. However, this objective has not been realized, with the actual number of jobs created falling unbelievably short of the projected figures.

Two major economic reforms initiated by the Modi administration—the demonetization of high-value currency notes in November 2016 and the implementation of the Goods and Services Tax (GST) in July 2017—were intended to streamline the economy and broaden the tax base. Nevertheless, these policies have had huge unforeseen negative impacts on the job market.

Demonetization, which was aimed at curbing black money and corruption, resulted in significant cash shortages across the country, disrupting the operations of small and medium-sized businesses that heavily relied on cash transactions. Many of these enterprises struggled to pay their workers or continue their business, leading to job losses and reduced employment opportunities.

Similarly, the GST, designed to unify India’s complex tax structure into a single tax system, created initial confusion and compliance challenges for businesses. The transition to the new tax regime necessitated adjustments in business processes, and the increased compliance burden particularly affected the informal sector and small businesses, which are significant employment generators in India.

These economic policies, while potentially beneficial in the long term as they believe, have had a ripple effect on employment in various sectors, with certain industries taking a more significant hit. The informal sector, which employs a large portion of the Indian workforce, was particularly vulnerable to these changes. The disruption caused by these reforms has been a contributing factor to the ongoing issue of unemployment in the country.

The situation is further highlighted by the stark unemployment figures from states like Haryana, which reported an unemployment rate of 37.4 percent as of December 2022. This figure is significantly higher than the national average and underscores the severity of the job crisis in certain regions. The high unemployment rate in Haryana is indicative of the broader challenges that the nation faces regarding job creation, economic growth, and social harmony.

Persistent unemployment has the potential to impede economic development, as it limits consumer spending power and can lead to a reduction in overall demand for goods and services.

Moreover, high unemployment rates can foster social unrest and disillusionment among the youth, who may feel marginalized in the absence of adequate job opportunities.

The failure to address this critical issue could have long-term repercussions for India’s stability and progress, making it imperative for the government to take more effective measures to stimulate job creation and support the affected sectors to ensure a more inclusive and robust economic future.

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