Patralekha Chatterjee | Bring jobs back to the top of India's political agenda

In April 2022, while walking around Lal Gumbad Basti, a low-income neighbourhood, just beside tony, tree-lined Panchsheel Park in South Delhi, I met Angoori Devi, a 70-year-old widow. She sold parathas for a living. Words like “consumer food price inflation” or “retail inflation” were not part of her vocabulary. But she told me her regular customers were ordering much less. Many young mothers I met in the colony had cut down on milk for their children. They ate less vegetables. The Covid-19 pandemic-induced lockdown had shaved off household savings; many families told me they were in deep debt.

Cut to September 2023. Amid the swirl of geopolitical stories about India’s friends, foes, and frenemies, near and far, one thing leaps out again -- the long shadow of household debt.

This month, the Reserve Bank of India revealed that Indian households were saving less and bor rowing more. According to the RBI, as a percentage of the gross domestic product, households’ financial liabilities shot up to 5.8 per cent in 2022-23, up from 3.8 per cent in the previous year.
Meanwhile, as Money Control, a leading financial portal, pointed out in its analysis of the latest RBI data: “Indian households saved 19 per cent less in 2022-23 compared to 2021-22 on a net basis, with the absolute amount of Rs 13.77 lakh crores falling to just 5.1 per cent of the economy's GDP.”

A recent visit to Greater Kailash-I M block, one of Delhi’s most popular markets, was quite revealing. Several familiar stores had shut down. Every other salesperson spoke of falling footfalls. Many stores simply can no longer afford to pay the high rents.

You can slice and dice data in many ways. But to an ordinary citizen, much of what one sees around points to erosion of the spending power of Indian households. I am leaving out the super-rich.

The ministry of finance says there is no distress. “Critical voices have been raised about household savings and its overall effect on the economy. However, data indicates that changing consumer preference for different financial products is the real reason for the household savings and there is no distress as is being circulated in some circles,” it said on X (formerly Twitter) on September 21 to rebut critics.

The “State of Working India 2023” report, just released by Azim Premji University, should be read against this backdrop.

Arguably, we are hugely handicapped by the fact that India has not had a Census since 2011. But the report which taps into other official data sets makes some very important and worrying observations.

The report tells us that “caste-based segregation has reduced. In the early 1980s, Scheduled Caste workers were more than five times over-represented in waste-related work and over four times in leather-related work. This has declined rapidly over time, though it is not eliminated as of 2021-22”.

After stagnating since the 1980s, the share of workers in India with regular wage or salaried work started going up in 2004, increasing from 18 per cent to 25 per cent for men and 10 per cent to 25 per cent for women. Between 2017 and 2019 this jumped to five million per year.

Since 2019, however, the pace of regular wage jobs creation has decreased due to the growth slowdown and the pandemic.

Unemployment is falling, but remains high.  “Job creation continues to be India’s main challenge,” the report notes. 

The “J word” refuses to disappear.

We might gloat that India has overtaken the United Kingdom to become the fifth largest economy in the world but “economic growth remains weakly connected to job creation”, as the report puts it. This is the stark reality which cannot be glossed over in a country with a population of 1.4 billion and whose median age is 28. We are a young nation; the vast majority are job-seekers.

Encouragingly, the report points out, unemployment is lower post-Covid for all education levels. “But it remains above 15 per cent for graduates, and more worryingly, it touches a huge 42 per cent for young graduates. At the other extreme, among older, less educated workers, it is in the range of 2-3 per cent.”

The report points out that women and Scheduled Castes are over-represented in low paying occupations.

What does that tell you about a nation aspiring to be a leader in the knowledge economy and one which is “transitioning from women’s development to women-led development”, as the Prime Minister put it the other day.

After falling or being stagnant since 2004, female employment rates have indeed risen since 2019 due to a distress-led increase in self-employment, according to the report. But here is the rub -- earnings from self-employment have declined in real terms over this period.

What is really worrying: even the good news about working women has a dark side.

The report says that districts where women experience less restrictions are also the ones where women are likely to undertake paid work but there is evidence for a backlash effect as well. “Women who are more likely to do paid work reside in districts where domestic violence is more prevalent. This could be because of the backlash effect. The suggested mechanism is that working women are more likely to face partner violence due to challenging of established gender norms.”

These are India’s pain points.  

Even as we celebrate the country’s triumphs in science and sports, it is vital that we spotlight these concerns. There are signs that the economy and job creation will be back again in the news as several states gear up for Assembly elections soon. Ruling parties in the poll-bound states (Madhya Pradesh, Telangana, Rajasthan and Chhattisgarh) are platforming their own schemes to address the employment situation. Rajasthan, for example, has passed the Rajasthan Minimum Guaranteed Income Bill 2023. Telangana has recently started a programme offering financial assistance of Rs 1 lakh to those engaged in community-based traditional occupations. The Chhattisgarh government has done away with the provision of stipend for government staffers appointed through the direct recruitment process and who were getting full salaries only from the fourth year of appointment.

This move is expected to benefit nearly 38,000 government officials and employees. Madhya Pradesh chief minister Shivraj Singh Chouhan has not talked much about jobs but the issue is not going away.

Bill Clinton’s famous slogan -- “it’s the economy, stupid” resonated; it helped him become US President in the 1992 election. 

In India, it is never just the economy, but could we bring jobs back to the top of the political agenda, for the sake of young Indians?