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Before you listen to this episode of the Seen and the Unseen, I have a recommendation for
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Do check out Pullia Baazi, hosted by Saurabh Chandra and Pranay Kottaswane, two really
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good friends of mine, kick ass podcast in Hindi.
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Last week, the Railway Recruitment Board conducted an examination to fill 62,000 vacancies.
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That's a lot of vacancies, right?
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And 1.9 crore people, 19 million people, applied for those 62,000 posts.
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That's 302 applicants for each job.
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And while the jobs were low-level jobs, gate men, points men, gang men, porter, and so
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on, requiring no more than a 10th standard certificate, the applicants included thousands
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of people with PhDs, master's degrees, engineering degrees, and so on.
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And they want to be gate man, points man, gang man, porter.
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If you listen to this podcast, you're the member of an elite.
#
Your own life doesn't really reflect what's happening out there, but this is a real India
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and things are getting worse.
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Welcome to the Seen and the Unseen, our weekly podcast on economics, politics, and behavioral
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Please welcome your host, Amit Barma.
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Welcome to the Seen and the Unseen.
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Today's episode is about the impending jobs crisis in India, or rather the ongoing jobs
#
And my guest is my old friend, the brilliant Yazad Jal.
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I first met Yazad around 15 years ago when he was an early blogger like me and used to
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work as CEO of Praja, a Mumbai NGO that works with government to make it more accountable.
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He then went to the US, got an MBA at Yale, worked as a consultant at firms like McKinsey
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and IBM, and then decided to come back to India.
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He now works at the Takshashila Institution in Bangalore and heads a project called 20
#
The purpose of this project is to try and understand India's jobs crisis, to propose
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solutions and bring all of this into the public discourse.
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There'll be a book at the end of this, perhaps even films and so on, but that's down the
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As of now, Yazad and his team is collecting data and coming to terms with the enormity
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I've been looking forward to this conversation, but before we begin, a quick commercial break.
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Yazad, welcome to the Scene in the Yarn scene.
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Yazad, I've actually done an episode in the past on the jobs crisis, I think it was with
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Vivek Kaul, but I get the sense that even I don't fully understand how bad things are.
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So give us all a sense of what this jobs crisis is like.
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It's enormous, is perhaps the best word to put it.
#
According to Labour Ministry data, we have 12 million people entering the workforce every
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That's 1 million a month.
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Additionally, we have approximately 6.5 to 7 million jobs that are being lost in agriculture
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So we have around about 18 to 19 million jobs.
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That doesn't count other sectors and other job losses.
#
So rounding it off, we have around about 20 million jobs that need to be created every
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That's about 16 or 17 lakh people coming into the workforce every month.
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So when we look at that, somebody would ask, but of course jobs are also being created.
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It's not that we just have this gap.
#
Different surveys give us different figures.
#
For example, between 2011 to 2015, we created around about 7 million jobs total.
#
Between 2013 and 2016, we created between 1.5 to 1.4 million jobs.
#
That's 1.5 to 4 lakh jobs in the entire year.
#
So other surveys show that we create 7 million jobs a year.
#
Even the most optimistic of those, which I don't believe, talked about by Sujit Bhalla,
#
said that we created 12 million jobs in a year.
#
None of those come close to the figure that we really need to create, the 20 million jobs
#
that we're talking about.
#
And frankly, Sujit Bhalla's 12 million figure is just nonsense.
#
I mean, I don't want to be harsh and focus on personalities, but he's renowned for getting
#
everything wrong through his career.
#
I mean, for example, I'll give you one example where those figures don't work out.
#
They take the employment, the EPF or the Employment Provident Fund Organization data, and then
#
they look at new provident fund accounts that have been open for workers aged 18 to 21 years.
#
And they assume that 80% of workers in this age bracket are first time workers.
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That assumption is not justified.
#
So you arrive at a figure of 1.8 million new jobs in the sector and this age group without
#
having any sort of firm foundation for that by just making a little bit of statistical
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juggernaut, if one must say.
#
But the most optimistic of it is even around about 60% of what is required in the economy
#
That's the reason why when you have these things like the Railway Recruitment Board
#
or the UP police, which, you know, notified for like a few thousand jobs and they got,
#
I'm sorry, 62 jobs, I'm sorry.
#
The UP police gave an ad out for 62 jobs for a communications post, which required a fifth
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They got more than 3000 PhDs applying for that same job.
#
So we have this gap and that is why you have people who are highly educated looking for
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the first possible or any possible chance or opportunity they have.
#
So in a sense, the situation is quite dire.
#
And that, you know, that speaks to a number of things like that kind of a figure with
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thousands and even lakhs of, you know, where you have more than 300 applicants for a single
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low level government job and so many people are so well educated speaks to a number of
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One, it tells you that there's just a lack of jobs out there.
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Two, it tells you that there's a mismatch between education and employment that somehow
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that demand supply relationship that should exist between the two does not.
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And obviously we've both spoken about this many times in the past.
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Part of this is because markets aren't allowed to operate in either of those fields and that
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And also there is an interesting point that these people, that there is this greater demand
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for public sector jobs, government jobs, because that just not only tells you that that kind
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of security is valued, but it also tells you the uncertainty and the insecurities that
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come with private sector jobs and private sector jobs across India aren't really the
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sort of jobs that elites like you and I might get where you get a salary and you have your
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perquisites and there's a contract and all of that.
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But they're pretty dire.
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Most of them are in the informal sector, which only exists because of bad regulation.
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But I'll come to all of these later.
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I'd like to explore all of these, but first to just sort of start with a basic point of
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misunderstanding that a lot of people have.
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Can you define what a job is for me?
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So that's actually difficult to, so whether it's paid employment or self-employment, there
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is no clear definition of a job.
#
What we do have is we have formal jobs and informal jobs in India.
#
So a formal job has an explicit contract, while an informal job has no such contract
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And additionally, we have what we call the organized sector and the unorganized sector.
#
So the unorganized sector is basically unincorporated private enterprises with 10 or less workers
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So these are the micro and the mini kind of organizations.
#
And between 80 to 90% of working-age population people either work in this unorganized sector
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So a large percentage of these are self-employed.
#
And part of this unorganized sector might be formal or is all of it informal?
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Part of it could be formal, but very doubtful.
#
So most of it, the formal sector is in the formal organized sector is what we really
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So when, for example, there was a news item recently that we had tech firms were hiring.
#
So those would all be formal jobs in the organized sector.
#
These are large companies like TCS and Wipro and Infosys that were hiring.
#
And a big hoo-ha was made about it.
#
But the total number of jobs, if I remember right, was around about 24,000.
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So and there was supposed to be big news that 24,000 jobs, new jobs are being created.
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So those would all be formal organized sector jobs.
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But the vast majority of people who work in this country work in the informal and the
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So I'll take a brief detour here.
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What is the informal or unorganized sector?
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It exists because most small organizations in the country haven't been able to scale
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up for a variety of reasons.
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And also because in this, because of labor laws, it makes sense to kind of keep your
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So those are roughly the two reasons why you would have a large number of unorganized sector
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workers in the country.
#
In fact, I had a rant on this a couple of episodes ago, I think the demonetization episode
#
with our mutual friend Shruti, where we were lamenting how, you know, the informal sector
#
is often treated as if there is something morally wrong in being informal, you're evading
#
And what people don't understand and what I want to just keep stressing is that the
#
reason the informal sector exists is because it is forced to, because government regulations
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are so draconian and so stringent that most of those companies would not be able to comply
#
and would not be able to exist in the formal sector.
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And therefore they are forced to exist in the informal sector.
#
And that prevents them from scaling up to the kind of level that they otherwise would,
#
which would be great for both the nation and the economy in this whole virtuous cycle positive
#
some kind of way where they would generate far more employment and so on.
#
So we should not look at the informal sector as people who are somehow outside the law,
#
but as people who are not allowed to function because of the draconian nature of the law.
#
Sometime back we were talking to an exporter of textiles, garment manufacturer and exporter,
#
the quite large conglomerate, and they were telling me that they keep their factories
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to round about two and a half thousand workers max because of infrastructure reasons as well.
#
They want to make sure the workers are able to come to the factory easily enough while
#
in villages and other areas if it's more than an hour's journey, people simply won't come
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to work and that infrastructure doesn't exist in rural areas to help people simply commute
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And the other interesting thing, and this will lead me to my next question, and the
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other interesting thing here is that you mentioned how there was so much hoo-ha and hype about
#
the 24,000 new jobs which were all created in the formal sector and again for relative
#
elites and what people don't understand often is that much of the data is either coming
#
from the, much of the data on jobs is either coming from the formal sector or it's extrapolations
#
from data that comes from the formal sector.
#
The informal sector is very hard to get data that, you know, labor contractors kitne hain,
#
pakore walas kitna hain and so on, which is why when you look at something like demonetization
#
for example, it's hard to estimate the damage it did because most of the damage would have
#
happened in the informal sector which runs mainly on cash and of course 86% of the cash
#
supply was cut off and you have no idea of how many companies shut down on the margins,
#
how many livelihoods were destroyed because none of that is reflected in the data.
#
It's that sort of accurate and then the next broader question which I'd like you to sort
#
of expound on is what are the problems you face when you're doing a sort of project like
#
this where you're trying to understand the jobs crisis with data?
#
So there's a lot of problems with data.
#
I mean the Prime Minister himself has talked about and confessed that, you know, regarding
#
data there's hardly any numbers available in employment statistics.
#
He tried to get out of giving figures for this but he's right in the sense that we have
#
data from different sources.
#
We have labor ministry data.
#
We have the NSSO data, the National Sample Survey Organization data.
#
We have data from sources like the Employees Provident Fund which we shouldn't really be
#
using for job markets data but there is no central statistical kind of data repository
#
and apart from that there is no consistent collection of data as well.
#
So very often one has to rely on private sector data, data from sources like the CMI, the
#
Center for Monitoring the Indian Economy and different sources of data then give different
#
pictures and one is confused at times at which source to take, what kind of assumptions to
#
make, how does one reconcile the data from different sources.
#
It's something that we are still grappling with right now, looking at all these figures
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and trying to make sense of them is a huge part of the problem as well and that's one
#
reason why we haven't been able to estimate for example how many jobs the economy is creating.
#
So let's say you have certain data sets at your disposal and you make of them what you
#
do but beyond that what are the sort of broad metrics that you draw upon to kind of figure
#
out how bad the problem is, is the problem getting worse and also there is, you know,
#
this added element of the fact that India is getting younger and this was supposed to
#
be what people call the demographic dividend because you know the average age in the country
#
today is 27, 60% of the country is actually born after liberalization so they can't possibly
#
relate to what we went through before that and which is why there is also a sort of growing
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romanticization among young people of socialist ideas and so on because they haven't lived
#
through those years but that's an aside but leaving that aside, you know, we were supposed
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to benefit from this demographic dividend where these tens of millions of enthusiastic
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entrepreneurial young people would take the country forward but what we instead have is
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more of a demographic disaster where you have these tens of millions of young people coming
#
into the workforce as the country gets younger but they haven't been educated well which
#
is a whole different subject and even those who have some education are misfits and cannot
#
get the kind of jobs that the skill requires or don't have the skills that the jobs require.
#
So what are sort of, when you try to build a long-term narrative of this, what are the
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different kind of strands that you look at?
#
So there, I wouldn't be that pessimistic.
#
I think we still have a demographic dividend.
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I'm hoping that it does not turn into a disaster although we seem to be going that way right
#
So for example, one of the things we look at is labor force participation rate.
#
So what is the percentage of the population that is actually participating in the labor
#
force and that has seen a decline.
#
So between 2011 and 15, we saw a 3% decline in the labor force participation rate from
#
55% to around about 52% but what's far more worrying is that the female labor force participation
#
rate has declined dramatically from around about 34% to 27% in the last two decades.
#
So there are far fewer women working and this is especially true in the middle income sector.
#
So you don't see that really in poor women and you don't see that in highly educated
#
women but you see that in the sector in between where women are actually dropping out of the
#
labor force to stay at home.
#
Now one reason being given is that if you have higher income and the male is able to
#
provide for the family, then the woman doesn't see any need to work and there are also social
#
kind of strictures or social conditions that you know create some sort of barrier for women
#
working but that's a concerning figure.
#
I mean countries like Bangladesh have higher female labor force participation rates than
#
we do, close to 10% more than us.
#
Apart from that what we've seen recently is that jobs in agriculture are falling.
#
We've seen 26 million jobs lost in agriculture in the same period 2011-15 while we've seen
#
non-farm jobs grow by 33 million.
#
So that's what gives us, we were talking earlier, the 7 million figure of jobs being created
#
So that's one figure we look at, the labor force participation rate.
#
And just to segue from my listeners, as far as women's labor force participation is concerned,
#
Namita Bhandare had an excellent series in India Spend last year and your colleague Devika
#
Khair has written about this one, Pragati at thinkpragati.com, the magazine I read.
#
So do check those out and when I first realized this, this was very counterintuitive and mind-blowing
#
for me because I had always assumed that as India progresses and as things get better
#
for women, for example I point to a figure like rising divorce rates as a very positive
#
metric for the empowerment of women and my assumption was that however slow it is, women
#
So to then find that the labor force participation has actually declined was a huge revelation
#
for me which I'm still sort of wrapping my head about.
#
And to mention that for the reasons you mentioned and you can check out the other articles especially
#
in Namita Bhandare's analysis for more on that.
#
And the interesting thing about the job loss in agriculture is also that that is not necessarily
#
So you and I have been arguing forever that you know around 50 to 60 percent of this country
#
is employed in agriculture, the relative figure there in other countries is five percent or
#
six percent in the US and in Europe.
#
Part of the reason that so much of the country is trapped in the cycle of dependency is again
#
bad government policy and they're not able to escape and we've had some episodes on this
#
in the past including the very last episode with Mr. Gunwant Patil in Hindi, please check
#
And one of the ways through which this has happened elsewhere across the world at that
#
fifty percent becomes five percent which is a natural process everyone goes through is
#
that productivity has gone up in those countries and it hasn't to the same extent here.
#
And I know you have some larger points to make on labor force productivity not just
#
in the agriculture sector but overall.
#
So yes, labor productivity itself that we're looking at, once again we're looking at these
#
figures of the years 2011 to 15 for which we have proper data that fell to 3.84 percent.
#
So during the first decade of the century from 2000 to 2010 our productivity grew at
#
an annual rate of 5.52 percent.
#
Now labor force productivity is a very important figure when you're looking at GDP.
#
Can you define it for me?
#
So I don't know the term so I'm assuming that labor force productivity is you sort of
#
divide the GDP by the number of people in the labor force.
#
And therefore you say that okay each person is producing this much value.
#
So now to obtain higher GDP growth for example if we have to obtain a GDP of 9 percent we
#
need to see our labor force productivity grow at round about 7.3 percent.
#
In 2015 it was 4.2 percent that was how much it grew by in 2015.
#
If we want to see 10 percent GDP growth we need to see our labor productivity grow at
#
round about 8.3 percent.
#
So these are important figures.
#
To look at it another way most of the workers that we have are medium skilled workers in
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India 60 percent of workers in India are medium skilled only 15 percent are high skilled and
#
most economies that did make that transition from developing to developed you know moved
#
into having higher labor force productivity.
#
Now today for example economies developed economies their labor productivity grows around
#
about 2 to 3 percent but they have a much wider base.
#
So for us to reach that percentage to us to reach that GDP growth we need our labor productivity
#
to grow at a commensurate rate.
#
France if I'm not wrong is the country with the highest labor force productivity and their
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labor is round about 40 times as productive as ours is.
#
And part of the point if I read you correctly you're making is it's a question of the level
#
of skilling in a highly skilled job you end up producing much more of value than say you
#
do in a lowly skilled job like if you're a worker in a factory whose only job is to put
#
nails into something and you have a whole bunch of manual laborers like that and that
#
productivity isn't high.
#
So part of the secret therefore is that you have skilling going up.
#
So you know more and more people do sort of more highly skilled jobs instead of getting
#
stuck there and part of the issue is that scale brings productivity and as we just discussed
#
Indian companies aren't really allowed to scale and therefore that keeps the productivity
#
low even Indian agriculture as my guest last week pointed out.
#
So one reason why you know you see only 5 percent of people working in agriculture is
#
because you see those 5 percent are really highly skilled in other countries.
#
You're using technologies, you're using harvesters, you're using tractors and so on and so forth
#
and you have fewer people working on much larger tracts of land while today in India
#
we have a lot of people working on smaller tracts of land.
#
So that's why agricultural productivity isn't high.
#
Even other sectors productivity in India needs to rise even in the manufacturing sector where
#
we've seen productivity stagnate by and large.
#
So people might naturally ask that ok 50 percent of the country approximately today survives
#
Yeah and it's a sort of a nebulous figure because a lot of that is part time and you
#
know it's associated I mean they're not directly farmers but whatever leaving aside it's let's
#
say it's around 50 percent and it's much more than it should be.
#
But if productivity in agriculture goes up and that number comes to 5 percent what happens
#
to the rest of the people?
#
Where do they get employed?
#
How are those jobs being generated?
#
That's a really big question because that would be even more than 20 billion that we'd
#
And what we see is we do see a lot of disguised unemployment out there where we think people
#
are employed but they're not and that bubbles up you know if it's not kind of taken care
#
of it bubbles up into social and political spheres.
#
Give me an example of that disguised unemployment like where we think they're employed but they're
#
So where for example an example is that you think that there are five people working on
#
a farm and that's what's being reported but there are only two people working on the farm
#
and there are three guys who are just sitting around doing nothing.
#
So those three guys are disguised unemployed.
#
We don't we think they're employed but they're not actually being employed they're not actually
#
doing any work it's just two people doing that work.
#
And you see that coming out in social unrest in the country whether it be you know in these
#
WhatsApp lynchings that happen where people get agitated whether it be in these cow lynchings
#
So all of these bubble up in social unrest as well and it's important to look at the
#
fact that it's not just restricted to economics.
#
You'd see these employment issues coming out in a variety of ways if they're not handled
#
And our mutual friend the economist Kumar Anand he's from Bihar and he had gone to Bihar
#
recently to spend time at Saharsa which is his hometown and he came back and we were
#
chatting and he traveled through Bihar during that trip and we came back and he was chatting
#
and he said that one of the images which will haunt him forever and a recurring image which
#
he saw not in his nightmares but in you know in real life in actual Bihar was that in so
#
many public spaces there would just be dozens and dozens of young men young men just standing
#
doing nothing maybe they're standing around the pawn shop maybe they are just standing
#
on the street looking at their phones or talking to each other or you know smoking cigarettes
#
or they're just standing there and this was an image I asked Snigdha Poonam about when
#
I did an episode on Young India with her Snigdha Poonam of course has written the excellent
#
book Dreamers and she kind of corroborated that she said that that was a familiar sight
#
for her as well and again one of the things a book does is kind of examine what these
#
young men do what they sort of go through the different directions they can go in and
#
she had a very powerful chapter on anger on what they do with their anger and a lot of
#
these men like for example she followed a guy who was part of a gaurakshak gang and
#
it lifted a social status to be able to express his bigotry in that way instead of keeping
#
it suppressed and you know 20 years ago it would have been the opposite you would benefit
#
from suppressing your bigotry and pretending to be a reasonable person but now it actually
#
pays to sort of act out on those impulses and there was another person she profiled
#
who was a warrior against love jihad for example and and it's kind of worrying that when you
#
just spoke about the social cost of all this this guy's unemployment or underemployment
#
which I shall also ask you about or just flat out unemployment that people are coming into
#
the workforce they are young and and they don't have jobs and where do they go and one
#
of the things they do is they become foot soldiers for whatever movement appeals to
#
their inherent tribalism correct and you know political parties and other institutions are
#
taking misusing you know a lot of these foot soldiers for their own ends and singh the
#
punnam has talked about that there's also this case where you know where you have farmers
#
whose children who are educated or somewhat educated then no longer want to go into agriculture
#
but they don't find any other avenues for them so they're they think that they've evolved
#
beyond agriculture they have more aspirational objectives they want to get to a government
#
job ideally which they find it very difficult to get and therefore they're you know part
#
of that group of people that you've seen around standing you know in village squares doing
#
nothing and you know ready to do the bidding of the first person who comes around and says
#
I'll give you three hundred rupees per day would you go out and do that and you can kind
#
of fill in the blanks and what that could be right so and I have a couple of questions
#
and taking on from that I'm going to ask you those after a brief commercial break hey everybody
#
welcome to another week on IVM podcast if you are not following us on social media please
#
do your IVM podcast on Twitter Facebook and Instagram also I wanted to ask everybody you
#
know it would be really great if you could recommend a show that you like to a friend
#
that's the way that we're going to spread the word about podcasting please please please
#
go ahead and do that this week on Cyrus says we have film critic Rajeev Masan Cyrus and
#
Rajeev discussed films they grew up on the allure of movie stars and the bright future
#
of Indian films on simplified Chuck Narayan and Sriketh tell us about eco-friendly Ganeshas
#
and how Ganpati immersions can be more environmentally friendly on the scene in the unseen Amit speaks
#
to Yazad Jaal a fellow for economic policy at the Takshashila Institute about India's
#
ongoing job crisis on the Prakriti podcast lawyer and policy analyst Amaya Naik joins
#
Pawan and Hamsini to discuss the Syrian civil war that's killed half a million people and
#
displaced more than 10 million Syrians this week on Pesa Vesa Anupam talks to Deepak Shinoi
#
Deepak is the founder of capital mind and they discussed portfolio management schemes
#
the rediscovery project is coming out with his fourth season don't forget to catch Ambika
#
and Hoshna with all new episodes from the 25th of September and with that let's go on
#
Welcome back to the scene in the unseen I'm chatting with my friend Yazad Jaal who's heading
#
a project at the Takshashila Institution called 20 million jobs whose idea is to make sense
#
of the jobs crisis in India and if possible if there are solutions he's more positive
#
about it than I am suggests solutions so Yazad we were discussing these millions and millions
#
of people coming into the workforce on a regular basis and there are no jobs for them and there's
#
a very sort of interesting anecdote that like first of all like I have two related observations
#
one of which leads into a question the first observation about people not wanting to do
#
farming anymore is an observation I've made on the past I think I had an episode with
#
Vivek called where we spoke about this but and I keep talking about it that all the recent
#
youth agitations we have had in the country are not over some higher causes or some great
#
noble principles of fighting for freedom or so on and so forth but they're all about jobs
#
and if you notice if or you know whether it's a party dars in Gujarat or the Jats in Haryana
#
or the Marathas in Maharashtra they're all from landowning cars and what's kind of happened
#
there is that with every generation the amount of land that a family has basically gets split
#
among the descendants who are usually more than one and therefore the land grows smaller
#
and smaller and what has happened with this generation especially is that land sizes across
#
India of these landowning cars have gotten so small that they're simply not sustainable.
#
Now we've discussed in past episodes on agriculture how you're not even allowed to exit agriculture
#
you can't sell agricultural land for non-agricultural purposes so these young men even if they wanted
#
to can't make a living of agriculture there isn't enough and therefore they are agitating
#
for jobs which are not being generated by industry and all of these agitations are
#
for increased reservations and government jobs and that's a really scary trend that
#
all of these recent youth agitations are about jobs and at some level arising from the failure
#
of our agriculture policy and my second observation at the end of which I have sort of a question
#
for you which you are uniquely placed to answer is our mutual friend Mohit Satyanand had once
#
told us about how he in Himachal he lives part of the year in Himachal and he's spent
#
a lot of time there and he had once retired and gone there before he came back and now
#
lives in Delhi and he lives in a village called Satholi and he's seen these kids grow up there
#
over this 20 year period and he points out that how what often happens there is that
#
the children of tradesmen like plumbers and watchmen and so on and so forth they get a
#
certain kind of education in the sense that they do their 10th they maybe do their 12th
#
also whether it's in government schools or bad private schools or whatever and having
#
done that education they then feel entitled to more than what their parents got they don't
#
want to be plumbers and they don't want to be sweepers and they don't want to be chaukidars
#
so they refuse those kind of jobs but at the same time they haven't learned those trades
#
either but at the same time they have been enormously undereducated so they are not really
#
equipped to do anything else and this brings me to one of the points I made at the start
#
of the episode that there is an enormous that part of the jobs crisis comes from our education
#
crisis that there is a mismatch our education system is not turning out people who are good
#
for anything and it is also not responding to the demand from industry that you know
#
give us these sort of people who do these sort of things and you've also you know in
#
the past you were one of the early members of the center for civil society in Delhi in
#
the late 1990s and you're fairly familiar with education also and would you say that's
#
a big part of the puzzle there's definitely part of the puzzle agreed because most people
#
that come out of even engineering colleges you know are not you know qualified to do
#
basic tasks in an engineering firm so that kind of mismatch between what our education
#
says on paper and what skills are actually learned in education is true we need to improve
#
that so that's one really big part of the problem the other part of the problem is that
#
we don't have an apprenticeship issue so you know there are countries which have big
#
apprenticeship programs where you know kids are apprenticed with you know somebody who
#
is working in that area and you spend one two three years as an apprentice and then
#
you learn that skill and then you are able to do that on your own so you are able you
#
then get to be much better skilled than just what an education would give you and other
#
countries also respect dignity of labor correct which is you know not the case here as in
#
these kids that Mohit speaks about he's seen them grow up and then for them being a plumber
#
or a watchman is below their dignity they would rather do nothing at all that's right
#
and I mean I'll give you a personal example my cousin's son is a plumber in Australia
#
and he's perfectly happy with it it's it's something that he does you know out of great
#
joy you know doing that it's if you were to ask if he was living in India would he be
#
happy doing it being a plumber maybe not because there isn't even that social kind of acceptance
#
of certain trades maybe I'm just thinking aloud here maybe caste also has something
#
to do with it because those kind of jobs menial jobs are done by the lower caste and therefore
#
that social angle gets into it comes into play that's also possible I was also looking
#
at another aspect of this which is vulnerability when we're looking at jobs we're also looking
#
at wages now one stat that really hit me recently was 80 percent of casual workers and 30 percent
#
of regular salaried workers earn less than what is the minimum wage in this country which
#
is approximately 66 rupees on average you know depending on where you are minimum wage
#
is a local subject so different areas of different minimum wages well 66 rupees for what unit
#
per day per day per day luckily and around about 78 percent of people in this country
#
are vulnerable in the sense that they're either self-employed or what we call own employed
#
in which case they are not employed by somebody else they are responsible for you know raising
#
their own salaries or their own income prime minister once talked about you know pakoda
#
sellers being you know a viable job and it really isn't because what people are looking
#
for is security and stability and what what we find instead is exactly the opposite a
#
large amount of vulnerability in jobs so much so that you know Manish Sabarwal of Team Leeds
#
has talked about this not being a jobs problem in the country but a wages problem and a vulnerability
#
problem where it's important that when we're talking about a job we should talk about something
#
that gives a certain level of stability to the worker and that is missing today so which
#
basically comes down to saying that you know you might say that on paper there are x number
#
of jobs but if a significant percentage of them don't have a security and stability and
#
b don't have high enough wages to really be meaningful in any sense of investing for the
#
future then are they really jobs correct they very often are not right so that level of
#
vulnerability is something that we need to look at another figure that I was talking
#
about what I was thinking of talking about when we're talking about productivity earlier
#
is employment elasticity so this might be a slightly wonky economics term to discuss
#
you've already lost me carry on I'm sorry tell us what it is one thing that we've talked
#
about a lot of times is that if the economy grows if GDP grows employment grows along
#
with it so one way to make sure that we have jobs is to simply let the economy grow but
#
that may or may not be true so one of the things we look at is what's called the employment
#
elasticity of income which is a correlation of employment with GDP so this percentage
#
of change in employment associated with a one percentage point change in GDP growth
#
so it's the ability of an economy to generate employment opportunities for its population
#
as the economy grows so if your elasticity is one it means that for every point that
#
the GDP grows you have a one percentage point growth in jobs as well which is ideal if it's
#
zero it means that jobs don't grow at all productivity grows but jobs don't so it simply
#
means that the economy grows but jobs don't grow at all and the worst part is if it's
#
negative which means that the economy grows but jobs actually shrink it means that you
#
know maybe you're getting more capital intensive jobs so between 99 and 2000 to 2004 and 5
#
our employment elasticity was around about 0.5 percent 0.5 which meant that for every
#
percentage that the economy grew we got 0.5 percent growth in jobs so like if the economy
#
grew 7 percent you'd have a 3.5 percent growth in jobs correct the next five years from 2004
#
5 to not 2009 10 we saw an employment elasticity of 0.01 which meant basically as the economy
#
grew we got hardly any jobs so virtually it was close to zero in the last in the land
#
in from 2009 10 to 2011 12 the last years we had the figures for this was like 0.18
#
it's a worrying figure because what it tells us is that the economy will still grow but
#
jobs don't grow along with the economy which is one thing that we would like to see and
#
it might indicate that the economy is growing in the more highly skilled sectors rather
#
than correct so part of it could be good when we're looking at say agriculture we see that
#
the agricultural employment elasticity is negative it's minus 0.041 which means as the
#
economy grows agricultural sector loses jobs right what we would like to see and some of
#
it is heartening that we would like to see a corresponding growth in other sectors so
#
in manufacturing we do see some amount of growth we see an employment elasticity of
#
0.33 but in a sector like construction we see an employment elasticity of 1 so as the
#
economy grows construction adds the same number of jobs in a sense in its sector as the economy
#
grows and because farming can't sustain so many workers they move to manufacturing they
#
move especially to construction and they move into urban areas where there are more opportunities
#
for them which is a shift in the right direction which is a shift that we should be seeing
#
we should be seeing a higher employment elasticity in manufacturing because that's one sector
#
that we see when people move out of agriculture we see people largely moving into manufacturing
#
in India we've seen a lot of people moving straight to services so we see for example
#
the guy who is unemployed in agriculture in the rural areas comes to the urban areas and
#
most probably works as a swiggy driver right which is also great I mean now here's my next
#
question to you I mean you know this is clearly not something that any one party can be blamed
#
for per se our whole system of governance is like this has been like this for 71 plus
#
years and I think we have broadly agreed that a lot of this has been caused by the draconian
#
nature of the state but having said all of that what can the state now do to mitigate
#
this for example all the recent agitations which have happened Jats, Marathas, Partidas
#
etc are all a demand to the state to be the solution to this and that in no specific cases
#
gave us reservations but otherwise broadly people sort of tend to look at the Narendra
#
Modi government and say that hey you know okay the previous guys might have done whatever
#
you create the jobs can they create the jobs to what extent can they solve this problem
#
so let me talk about some of the government schemes that are there and see how those work
#
out so the flagship scheme that was started out by the UPA government before and has been
#
continued by the Modi government is the national rural employment guarantee scheme which is
#
called NREGA or Mahatma Gandhi national rural employment guarantee scheme and one of the
#
things we found out is that it does improve food security so people there you know who
#
enroll under it do have a better chance of having better livelihood to some extent however
#
what it has also done it has killed the development of micro enterprises and villages so small
#
businesses small enterprises and villages have largely been killed because of the income
#
that provides and farmers out there the other thing that studies have found in NREGA is
#
that it doesn't effectively target people so only approximately 26 percent of those
#
you know applying for jobs and getting jobs in that are below the poverty line ideally
#
that figure should have been a hundred percent but only 26 percent below poverty line are
#
actually those who are getting benefit from this scheme another scheme that the prime
#
minister has talked about is being the mudra scheme you know the scheme that where he is
#
looking at self-employment and trying to improve entrepreneurship the mudra scheme gives loans
#
to you know micro entrepreneurs and there are three kinds of loans given the shishu
#
loan which is up to 50,000 rupees the Kishore loan which is 50,000 rupees to 5 lakhs and
#
the Tarun which is 5 lakhs to around about 1 million around about 10 lakhs and what we
#
find out that out of the 32.7 million loans that have been given out it rupees and loans
#
have been given out the vast majority 30.3 shishu loans so these are loans that are 50,000
#
rupees or less and you know researchers said that this is not really enough to create jobs
#
they have been reports of 55 million new jobs being created but it's highly unlikely that
#
these loans have been given out to people who were previously unemployed so these have
#
been given out to people who were previously employed in something else so these 55 million
#
jobs has been talked about in the mudra scheme as most probably no new net jobs have been
#
created we've just seen a shift in jobs from one area to another and also you don't see
#
the opportunity cost of all this like if the money was elsewhere it would have maybe created
#
jobs there and that not happening has correct so if money was spent in for example in infrastructure
#
we might have seen a much larger effect in it there are other you know PM, EGP and the
#
Pradhan Mantri Rosgarh Protsahan Yojana and the Gram Sadak Yojana and there are a lot
#
of schemes that come out but my main issue with a lot of these schemes is that one assumes
#
that the government is the one that should come out for the solutions but what we've
#
seen is a few things that we've been talking about internally about what could the ideal
#
solutions be to these issues the first would be a focus on large enterprises not small
#
and micro enterprises we need to see a scale up in industry because that's where most jobs
#
get created so that's where we see a much greater labour participation where we see
#
a much greater need for a labour force and currently what's happening is we are focusing
#
on the small and micro and the unorganized sector therefore while the challenge is to
#
bolster our organized sector have more jobs come in the organized sector and the formal
#
sector and that will happen only when we see industry scaling up and we see larger and
#
larger companies and you'd say that the government should enable that by getting out of the way
#
correct that's right other thing of course that the government should do is reform labour
#
laws this is an issue perhaps for another podcast or series of podcasts on you know
#
the problem that we having a labour laws but one of the things we see why we see that even
#
our employment elasticity is low is because when companies do scale up they'd rather invest
#
in capital than take the trouble of hiring more labour because of all the issues that
#
we have with labour laws in the country so reforming labour laws is a big thing the government
#
can do and what reforming labour laws would also do is like your first point was about
#
focus on large industry focus on getting companies in the formal sector to scale but since most
#
of this country's business is conducted in the informal sector what reforming labour
#
laws completely would also do is it would remove the disincentives for a lot of those
#
companies to come into the formal sector correct because a lot of the compliance issues they
#
face are because of these mad labour laws correct that if you have more than 20 people
#
you have to do this you have to do that you have to do this so typically you just can't
#
scale you can't comply and therefore if you reform them and make them sensible like in
#
most of the world then you know more of the informal sector comes into the formal sector
#
in a natural organic way with the right incentives rather than sort of be coerced into it and
#
inevitably shut down that's right the third thing that we're looking for is to create
#
an environment for investment in new cities because largely what we're seeing is we're
#
seeing greater employment in urban areas compared to rural areas we want to see that as well
#
because we want to see people moving out of agriculture in the rural areas into more urban
#
areas and one way of that happening is infrastructure development the establishment of new cities
#
the prime minister had once talked about creating a hundred new cities I think we most probably
#
had one most probably coming up Amaravati in the new state of in Andhra Pradesh so but
#
is it the government's job to create new cities I don't think it's the government's job to
#
create new cities it's the government's jobs to create incentives right or basically stay
#
out of the way so that new urban centers can come up right and it's these new urban centers
#
that will create more jobs which will create better infrastructure just building new cities
#
itself will create more jobs on a temporary basis but beyond that we have we have a lot
#
of potential in areas of health care in areas of education things that we need to improve
#
for our own country and areas that you know for higher education that we can build for
#
the rest of the world as well so these are areas that are potential solutions for us
#
where we can absorb the 20 million that each year that is going to come out for the next
#
few years for us so we need to have a plan that can absorb that many new entrants to
#
the labor force every year so it's not that we have 20 million jobs as one final figure
#
it's 20 million jobs every year that need to be created and even not just the 20 million
#
jobs created for the new entrants into the workforce but also taking into account that
#
there's a lot of these guys run employment that a lot of people are underemployed that
#
they don't have for example that there's that there's so much labor vulnerability where
#
you're selling pakoras and that's not really a real job it's not even you can't even call
#
that guy an entrepreneur because he's not building a business he's just surviving on
#
a day-to-day basis and you know tell me if you agree but I think the fundamental problem
#
of why we are in this mess is a mindset problem we've had for 71 years and that's a mindset
#
problem of command and control that an economy can be planned from above and that essentially
#
you know it's that whole thing about the citizens of a country being subjects to the rulers
#
and the rulers will set the rules and decide what happens and give the requisite permissions
#
for everything and keep everyone on tight leash and what that has done is that that
#
that didn't allow a manufacturing revolution to happen in India when it should have because
#
our greatest strength was our labor force in China stole the marsh there and despite
#
the limited liberalization of 91 and I always use the word limited with it because it really
#
it was it was very limited and not a true liberalization and despite that that mindset
#
still persists whether it was in the previous UPA government or whether it is with Narendra
#
Modi that okay government we'll build all these cities we'll do this we'll skill people
#
we'll and that's completely the wrong mindset the right mindset which these people don't
#
have because they don't understand spontaneous orders and how economies and cities work in
#
a positive some way is that you just allow the entrepreneurial energy of people to express
#
itself allow it fully and when that happens all this will take care of itself growth will
#
happen jobs will come and I think most people don't understand except people who run businesses
#
themselves the extent to which we are still tied up in chains true that's quite true
#
so it is not the question of just creating lakhs and lakhs of entrepreneurs either it's
#
you know it's just perhaps creating a few thousand entrepreneurs who would then be able
#
to employ hundreds of thousands of people themselves right so when we talk because there's
#
a lot of talk about you know how entrepreneurship would be the next revolution and one must
#
be careful that you know when you're talking about entrepreneurship we're not talking about
#
the pakoda wala as an entrepreneur right we are talking about an entrepreneur who actually
#
employs a few thousand people at least himself or herself right so you know I know that 20
#
million jobs project that you are on is still sort of at an early stage you're still kind
#
of gathering all of the data and you don't want to commit to sort of talking about solutions
#
this early and at a later point when you're ready we'll do a separate episode on that
#
once you have better more clarity on what specific policy measures and so on you'd like
#
to suggest but just looking at sort of the scenario of jobs in India and it really looks
#
bleak to me because you have all these young men coming out into the workforce no jobs
#
all the relevant social problems that we discussed and it looks bleak to me I know you're more
#
hopeful about it so my question to you is what makes you despair and what makes you
#
hopeful about the medium term let's say the next 10 years of India keeping our youth in
#
mind so what makes me hopeful is that we do have you know youth that are coming out and
#
that are taking you know a lot of things in taking their own future in their own hands
#
in a sense when we talked about Snigdha Poonam's book in dreamers when you talk about the first
#
few chapters of the book where you have the guy who's teach me taking English classes
#
or the one who's setting up a clickbait factory so these are young people who are taking their
#
future into their own hands and we are seeing a certain level of of mental freedom in a
#
sense that they are able to do what they wanted to do and you know they're taking charge of
#
India in some sense so that makes me hopeful what makes me despair is that we don't have
#
enough of them and we we're not creating the conditions that would encourage more such
#
people to come up that we are actually we are still stuck you know we may no longer
#
have a planning commission we may have something called NITI Aayog but perhaps we are still
#
stuck in that same mindset where we expected something to be planned for us which is why
#
you know so many people run after jobs in the railways or in the government police while
#
we should be really looking at both entrepreneurs as well as as well as the the private sector
#
to be able to help us create the number of jobs that we need and you know in the minds
#
of some people private sector is like it's it's a silly term but the thing is what is
#
private sector what entrepreneurs is society you know there's no public sector in private
#
sector in public sector is noble and good in private sector is greedy capitalist no
#
private sector is society markets are how a society interacts with itself and how people
#
take care of each other and on that final positive note of hope that I know we'll both
#
agree on thank you so much for coming thank you for having me if you enjoyed listening
#
to this episode of the scene in the unseen do head on over to Twitter and follow at 20
#
M jobs at 20 M jobs is a Twitter handle of 20 million jobs the project that Yazad Jal
#
and colleagues of his run at the Takshashila institution you can follow Yazad on Twitter
#
at Yazad Jal Y A Z A D J A L you can follow me at Amit Verma A M I T V A R M A and you
#
can browse past episodes of the scene in the unseen at scene unseen dot I N thank you
#
Do you have a night routine well everyone has one and the to do list usually looks like
#
this brush your teeth set that alarm get into your pajamas and switch off those screens
#
but here's one more to add to that list tune into the positively unlimited podcast for
#
a dose of positive action and tips on how to build powerful mindsets episodes out every
#
Monday on the IVM podcast app IVM podcast dot com or wherever you tune into podcasts.
#
Have you gotten yourself a gym membership and shown up only a few times are long working
#
hours cutting your fitness goals short how about you change things a little even a small
#
effort can make a big difference and I'll tell you how and what exactly hi guys I am
#
coach Urmi and on the kinetic living podcast you can look forward to some interesting stories
#
of people who have changed the way they look at fitness after their kinetic journeys episodes
#
out every Wednesday on the IVM app website and anywhere you get your podcast from.
