Eliminate the resource curse by reducing our resource.

An ex-professor of Jawaharlal Nehru University, (where else?), writes that creating jobs is the most important task for the government. There were 2.3 million applications for the post of 368 posts of peons in UP last year and there have been recurrent agitations for reservations in government jobs by various communities and yet, the unemployment rate as a proportion of the total labor force was a mere 2.7%. How can we say that there is a lack of jobs when the unemployment ratio is perhaps the lowest in the world? Because, " In a country like India, poor people just cannot afford to be unemployed and find whatever work they can, simply to subsist. A significant proportion of their work, however, is neither sufficiently recognized nor rewarded. There are some who work hard for a living. There are many who work very hard but do not earn enough for a living. There are others who work but are paid little for their labor," says the article. Why? Because," in 2011-2012 the total labor force in India was 472 million ". That is the combined populations of the US, 319 million, Germany, 81 million, and Britain, 65 million. " India's most abundant resource, labor, is underutilized," the article says. Precisely. It is a classical 'resource curse'. Figures are interesting. Employment growth was picking up from 1983-1994, was strong from 1994 to 2005, when there was a BJP government and then falls off steeply from 2005 to 2012, when the Congress was in power. In fact, 5 million jobs were lost when the economy was growing strongly and employment in agriculture fell when trillions of rupees were spent on rural employment guarantee scheme. Another point to note is that employment was growing when the interest rate was very high, varying between 9 and 12% and the prime lending rate was higher than 12%. This article should have been written in 2007, when ministers were partying at Davos. Trouble is that the global economy is weak and the IMF keeps reducing the expected growth rate for this and the next year. With its economy faltering China is dumping its goods on world markets, depressing prices and hurting local industries. Governments are frozen in a state of inertia because market reforms and reforms of labor laws are difficult. Lack of jobs, and resultant poverty, makes people easy prey for the unscrupulous. HDFC Life was running a racket in Mumbai where young men were offering loans at very low rates if anyone bought insurance from them. We desperately need to create millions of meaningful jobs, but for that we need to change our rules so that business can flourish. Most of all we need to reduce our population. Else, nothing will work.