Patralekha Chatterjee | Ensure growth with jobs: Don’t leave poor behind

There is a line in Princeton professor Ashoka Mody’s latest book India is Broken and Why it’s Hard to Fix that is relevant at all times. But more so now, as we approach February 1, when Union finance minister Nirmala Sitharaman will present the last full Budget of the Narendra Modi government before the 2024 general election. “In thinking of India’s past, and even more so its future, we must keep our gaze unflinchingly on employment,” writes Mody in his concluding observations on “feasible idealism”. Because “good jobs”, as the author goes on to say, “are the essence of economic development, indispensable for economic welfare as well as human dignity. Good jobs are also the point of contact between economics and the politics of social discontent”.

Amid all the headline-grabbing turmoil and turbulence in recent days, this is a key message we must not forget. Time will tell whether Budget 2023 will serve as a stimulus and propel India towards faster economic growth. These are challenging times.  The Covid-19 pandemic is still not over. The global economy continues to be weakened by the ongoing war in Ukraine through significant disruptions in trade, as well as food and fuel price shocks.

But you do not have to be an economist to know that even when India’s economy is growing, there are not enough jobs. This “jobless growth” has left millions of Indians in precarious conditions, scrounging for whatever work they can get in the country’s informal economy. Such work comes with no guarantee, written contract, and has scant benefits.

As Amit Basole, who heads the Centre for Sustainable Employment in Azim Premji University, and works on “jobless growth” in India, pointed out in a recent commentary piece in a national daily: “Cross-country data show that GDP growth is usually positively related to employment growth.” This means when the economy is growing faster, a lot more jobs are created. But “for India, on the other hand, this relationship is almost non-existent”, as Basole notes. This has been the case in recent decades.

This is in sharp contrast to many other countries in Asia, which have had much more job-rich economic growth. Vietnam, a key manufacturer of goods like textiles, footwear, and electronics for international brands, is one recent case of an impressive rise in job-rich economic growth.

In the Indian context, social policy, which includes social protection, is critical. How have some of the government schemes and interventions fared in this regard?

The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) is the Government of India’s flagship rural employment programme which aims to provide at least 100 days of guaranteed wage employment based on demand. Analysis from the Centre for Policy Research’s (CPR) Accountability Initiative (a research group which works on strengthening transparency and accountability in governance) shows that while notified wage rates increased by four per cent between FY 2020-21 and FY 2021-22, actual wage rates, calculated as the mean wages paid in April-December 2021, were lower than the notified wage rate in 16 out of 28 states. Kerala and Jharkhand were the exceptions. Both states paid on average a wage rate greater than the notified wage rates. The unemployment rate in urban India is currently higher than in rural India. Many experts say there is an urgent need for a similar employment guarantee scheme for cities. Last year, Rajasthan kicked off such a scheme. As part of it, renovation work at the 18th century Khania Ki Baori stepwell has started.

Researchers working with CPR’s Accountability Initiative also throw light on several other central schemes. Take the Jal Jeevan Mission, for example. This is the Government of India’s rural drinking water programme to provide functional tap connections to every household for drinking, cooking, and other domestic needs on a sustainable basis by 2024. “As on 1 January 2023, more than a year away from the completion date in 2024, 7.56 crore or 47 per cent rural households had been provided new Functional Household Tap Connections (FHTCs). However, not all FHTCs are functional. According to the Functionality Assessment of Household Tap Connections 2022 Report, only 62 per cent of the households surveyed had overall functionality,” says a Budget Brief by Accountability Initiative. For context, a household tap connection is said to be fully functional when potable water is provided in adequate quantity of at least 55 lpcd (litres per capita per day) daily. It is considered partially functional if potable water is provided in a quantity of 40 to 55 lpcd daily for at least nine to 12 months a year. “As on 1 January 2023, 10 out of 37 states had partially functional FHTCs with 40 lpcd coverage over 80 per cent rural households. Of these states, Goa, Gujarat, and Telangana have consistently maintained 100 per cent 40 lpcd coverage since FY 2021-22. Using the 55 lpcd norms as prescribed by the scheme, only four states -- namely Bihar, Gujarat, Haryana, and Telangana -- had a coverage of at least 80 per cent of households in FY 2021-22. This remained the same in FY 2022-23. Of these, Gujarat and Telangana had 100 per cent of their rural habitations covered under 55 lpcd.”

Other writers have pointed out another critical missing link. The Jal Jeevan Mission is an ambitious Central government scheme but it does not factor in the caste dynamics that prevails in much of rural India. Dalits continue to face casteism in accessing clean water.

Nutrition is another critical area. In 2021-22, the Central government restructured the Integrated Child Development Services (ICDS), Poshan (Prime Minister’s Overarching Scheme for Holistic Nourishment) Abhiyaan, and the Scheme for Adolescent Girls (SAG) into Mission Saksham Anganwadi and Poshan 2.0. This too needs strengthening. Millions of children in India are still malnourished. There are huge variations between states on minimum dietary diversity, defined as the consumption of at least four (out of eight) food groups such as breast milk, legumes and nuts, dairy products, eggs, etc. Many states continue to fare poorly on this critical indicator.

In the coming days, we will hear a lot of “GDP talk”. But it is important to remember that while economic growth is a prerequisite for stepping up productive employment, by itself, it does not necessarily translate into more and better jobs, especially for the poor, vulnerable and those at risk of being left behind. In India, even the middle class, barring those with government jobs, have little by way of social protection if they lose their jobs. Imagine the situation of the working poor. They must get particular attention.