The left-wing Democratic Youth Federation of India (DYFI) has called for militant agitations in all states of India between February 10 and 20. The protests will be against the policies of the right-wing government led by Bharatiya Janata Party (BJP), which has overseen unemployment levels ballooning to a 45-year high in India.
Among the key demands behind the agitation will be the introduction of an urban employment guarantee scheme. It also seeks an expansion of the existing scheme under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) from the current 100 days of assured work to 300 days of jobs to all working age individuals and filling up the 7 million vacancies in government sectors.
The call was given on November 11 at the National Convention on Right to Employment organized by the DYFI, to chart a way forward to address the crisis of unemployment.
How big is the unemployment crisis in India?
As the Labour Bureau under the Ministry of Labour and Employment has been stopped from conducting its annual surveys, in 2016 under the BJP prime minister Narendra Modi, there is no official data on unemployment in the country.
However, according to the National Sample Survey Office (NSSO), unemployment in the year 2017-18 was 6%, which is a three-fold increase from 2% recorded in NSSO’s previous survey in 2012. Moreover, the Center for Monitoring Indian Economy has estimated an even bigger increase since 2017-18, at nearly 10% by the end of September.
Official unemployment figures are bound to be massively understating the real extent because the government employs the Usual Principal Subsidiary Status (UPSS) approach. Accordingly, anyone who has been able to find 30 days of work in a year is regarded as “employed”.
“This is an absurd criterion”, Preeti Shekar, the national Vice-President of DYFI, said while presenting a draft declaration. “The Usual Principal Status (UPS) approach requires 183 days of work in a year to call a person employed. This more sensible yardstick should be adopted for measuring unemployment.”
The declaration adds that by this measurement, “4 out of 10 Indians in the working age group do not get throughout the year work.” About 12.5 million households in the country are left without a single earner. Ramakumar, a member of the Kerala State Planning Board, explained that “until a few years ago, it was thought that underemployment, not unemployment, was the serious issue in India.”
“One cannot afford to stay unemployed for long, so people somehow managed to find some low-paid work for at least 30-40 days a year,” he added.
“However, this government led by Narendra Modi has succeeded in making unemployment also a serious issue,” he said. According to him the burden of unemployment is falling disproportionately on women, 16% of whom are unemployed in urban areas.
Particularly affected are young women. “Only 15% of the women in the age group of 15-29 years are working,” Ramakumar pointed out, adding that only nine countries in the world, including the war-torn Syria and Iraq, fare worse than India in this regard.
The young in general are disproportionately affected by unemployment. The latest NSSO survey noted that among the youth (15-40 year of age) the rate is as high as 9.2%. The figure is much higher for educated youth, standing at 26% for those in rural areas and 20% for those in urban areas.
Using data from the NSSO survey, Niyathi, a doctoral student at the Indian Statistical Institute, demonstrated that every increase in the level of educational qualification corresponds with an increase in the unemployment level.
Among literates with no formal schooling, the unemployment rate is 2.2% in urban areas. The figure rises to 6.8% for those who have completed middle school, 9.2% for secondary school and 14.5% for those who have completed higher secondary school. Among those who have a diploma, graduation and other higher qualifications, the unemployment level is 19.5%. Figures show a similar trend in rural areas.
It must be kept in mind that these rates are in accordance to the skewed measurement employed by government bodies.
Unemployment as a social and cultural problem
Widespread unemployment is turning the much-promised demographic dividend into a national threat, as many disaffected youngsters become easy prey for Hindu right, who channel their anger onto the already oppressed and marginalized in the country.
Instances of mob violence, like the infamous gaurakshaks (cow-protectors), lynching cattle herders and others from lower castes and Muslims over suspicion of cow-slaughter have sharply gone up on the watch of the Modi government.
“Gauraksha (cow-protection) has become some sort of a semi-employment scheme, funded by right-wing forces who want to spread sectarianism and disharmony in the society,” remarked Jayati Ghosh, professor and head of the Centre for Economic Studies and Planning at Jawaharlal Nehru University. Therefore, unemployment, Ramakumar argued, “is not simply an economic issue, but a political, social and cultural problem too.”
Delegates outline possible action
However, unemployment is not an “unsolvable”, Ghosh insisted. She pointed out how filling up vacancies in government sectors alone will provide employment for over 7 million people, immediately.
Another massive boost to employment creation can be given by expanding public services like health, sanitation and education, which are severely underfunded. “Even if we bring the expenditure on public services up to the levels of our Asian neighbors such as Sri Lanka and Bangladesh,” Ghosh said “it will generate enough jobs to make a significant impact on unemployment levels.”
Delegates also agreed that an expansion of the current rural employment guarantee scheme, diluted by the present government, is also necessary as an immediate measure. The National Rural Employment Guarantee Act (NREGA) was passed in 2005 as part of the ‘common minimum programme’ agreed by the left parties as a precondition to support the minority government led by the Indian National Congress. The legislation that was eventually passed, which was renamed to include the name of Mahatma Gandhi, was significantly watered-down, guaranteeing only 100 days of work to one person from each rural household.
Under the present government, the number of days of work has been reducing year after year. Vikram Singh, an activist of the Students Federation of India, pointed out that the average number of days of work provided to rural households has gradually fallen from the meager 49 in 2015-16 to 46 in 2017-18 to 41 in 2018-19. In the current financial year, only 36 days of work has been provided on an average so far. “Only 15% of the total applicants are getting 100 days,” according to Singh.
Expand work guarantee to 300 days of work to every individual in rural areas, and not just one individual from each household, can be a crucial step towards addressing the current unemployment crisis, Ghosh argued.
Delegates at the convention also agreed that the rural employment guarantee scheme needs to be complemented with an urban employment guarantee scheme. Unemployment in Urban areas is about 2.5 higher than that in urban areas.
Subin Dennis, a researcher at the Tricontinental Institute for Social Research, outlined a possible framework for an urban employment guarantee scheme. The problem of urban job creation, which also needs to target educated youth, is significantly different from the rural areas where the jobs provided under the scheme involve casual manual work. His proposals built on the experiences of progressive state government in Kerala and Tripura in generating urban employment, and some recent studies conducted on the matter like the Centre for Sustainable Employment, Azim Premji University.
“A major demand that should accompany the enactment of an Urban Employment Guarantee (UEG) Act would be to expand public education and public healthcare. Universal public provisioning of these would add to the efforts to address the concerns of the educated unemployed. Likewise, universalizing and expanding the public distribution system would generate more jobs while also addressing food insecurity and malnutrition,” said Dennis.
Can the Indian economy afford to implement these measures?
Rubbishing the claims of the government and right-wing economists that there isn’t enough money to do so, Ghosh pointed out that the employment guarantee scheme is currently costing only 0.2% of the country’s GDP. A five-fold expansion of the budget will only cost 1% of the GDP. In comparison, the government, according to its own figures, has forsaken 5-6% of the GDP in tax concessions to corporations each year.
Moreover, every 100 rupees spent on creating jobs through MGNREGA has been generating 200 to 400 rupees of additional income, Ghosh said. “More of that will also come back as tax revenue because you will have expanded output and created more jobs.”
Ghosh also estimated the cost of introducing an urban employment programs, expansion of MGNREGA, increasing budget allocation for public services, and implementation of other measures proposed at the convention will together cost only 11% of the GDP.
She suggested that a modest wealth tax of merely 10% on the richest 0.01% will equal 2% of the GDP and a 30% inheritance tax will provide for another 1% of the GDP’s worth. She also stated that the tax concessions made to corporations, which amount to at least 5% of the GDP annually, must be withdrawn and used for employment generation.
Multinational corporations like Amazon and Google generate enormous revenue in India, but claim none of it as profit because they use it to “pay” its subsidiaries in other countries, mostly located in tax havens. Ghosh went on to argue that multinationals “behave as one company. Treat them as such and tax the revenue they gain in the country.” This she estimated will generate an amount equal to 3% of the GDP.
Together, this will provide for the 11% of GDP required to implement the measures proposed at the convention to address unemployment, according to Ghosh.
“We have to create a large enough public mobilization to force the government to muster the political will to do so,” Ghosh concluded.