Saturday, March 31, 2018

Why no pictures of hugging pakodawallahs?

There is a severe shortage of jobs in India, wrote C Bhagat. "Many educated youngsters continue to live with their parents," he wrote. "Whatever the government might think they are not happy just to be 'pakodawallahs'." A 'pakoda' is deep fried vegetables coated in spicy batter. Pakodas became news when the Prime Minister, responding to rising unemployment, said that earning Rs 200 per day selling pakodas is also employment. It is not just unemployment, a much bigger problem is under-employment, in that people resort to anything to earn just enough to survive, wrote G Sappal. Government programs have failed to create large scale meaningful employment. Employment levels actually fell between 2014 and 2016. "Employment in the total Indian economy shrank by 0.1% in financial year 2015-16 and by 0.2% in 2014-15," wrote M Chakravarty. These were years of high growth, with the GDP "growing by 7.4% in 2014-15 and 8.2% in 2015-16". Gopalan and Singhi used Labour Bureau data to conclude that the theory of 'jobless growth' is a myth. They found that 75 million jobs were created between 2009-10 and 2015-16, much more than the total of 61 million job seekers. 84% of workers earned less that Rs 10,000 per month, just over Rs 300 per day, and 40% of workers found work only for a part of the year. This view is countered by M Vyas who wrote that the same Labour Bureau figures show that job creation was good till 2011-12 but fell off sharply after that, so it should not be generalized. From now on workers maybe hired for fixed terms in all industries, the government said recently. From now "no notice of termination of employment shall be necessary in the case of temporary and badli workmen" said the amendment. 'Badli' means 'replacement'. India's labor laws are so stringent that companies are reluctant to expand in size so as to avoid employing more regular workers. Apparently there are 44 federal labor laws, some dating back to 1923, and 150 state laws in India. "Revamping labour laws and encouraging urbanization could create as many as 110 million jobs over the next 10 years," said Goldman Sachs. Unions condemned the government's move as an attempt to "make employment absolutely fragile just in the name of ease of doing business". Actually the shift to contract labour has been growing for 17 years, wrote M Chakravarty. From 1997-98 to 2014-15 the Compound Annual Growth Rate, or CAGR, of directly employed workers was 0.55% while the CAGR of contract workers was 6.79% over the same period. Contract workers increased from 16.41% to 35.35% in organized manufacturing. More than 90% of workers are in the informal sector without any job security anyway. While advising people to sell pakodas the Prime Minister is on a hugging spree. Better than fiddling?

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