Vol. XLIII No. 03 January 20, 2019

Explosive Unemployment: the Biggest threat to Modi’s Re-election Bid

Nilotpal Basu

IN the wake of major electoral reverses for the BJP in the recently held assembly elections to the five states, it has been widely recognized that the agrarian crisis and its most inhuman expression-the burgeoning farmers’ suicides have taken a heavy toll in the electoral battle field. However, commentators are loudly declaring nemesis for the ruling dispensation on another count. There is widespread belief that the tinder box of explosive unemployment will see Modi regime bite the dust; perhaps on a much bigger scale in the coming general elections.

There are hard evidences now for such a bleak prospect for the BJP. The Labour Bureau statistics which was not officially released in course of the winter session of the parliament even after being officially cleared by the minister of labour and employment compounds this growing perception. According to the report, India would be the nation of the most unemployed in the world. This official statistics itself recognizes the extremely bleak situation of unemployment. This holding back is in the heels of the refusal of the government to release the employment-unemployment survey data for the last two years. However, that does not stop other data from perhaps more credible sources being made available for public analysis. The Centre for Monitoring of Indian Economy (CMIE) has released data to show that in 2018 alone there has been a loss of 1.1 million jobs. The significance of these figures comes in the background of the withholding of Labour Bureau report for 2016-17 showing a four year high in unemployment. There is another serious study made by the Ashoka university economist who has pointed out that unemployment at the present juncture is the worst in the last two decades.


Since that day when Amit Shah publicly admitted in a television show that bringing back black money was an electoral gimmick, every projection and every claim of the government has been seen with a pinch of salt. Failure to deliver on electoral promises has been a key feature of governance under Narendra Modi. Credibility of official data was otherwise a strong point of governments of the past; the current regime has made that itself a major casualty. Data, from GDP to other major macroeconomic parameters have suffered ignominious manipulation, so much so, that from its own chief economic advisor to the RBI governor have themselves questioned these figures, not to speak of international agencies.

In the UN’s sustainable development goals, a special emphasis was attached to inclusive and sustained development. Despite this the nature of employment shows an increasingly skewed pattern with abysmal rate of women participation in the labour force.

Far from delivering on the promise of providing two crore jobs annually, the present situation is really dangerous. In December 2017, a total of 26.94 crore people were employed in rural parts of the country which dropped to 26.03 crore in December 2018 signaling a loss of more than 90 lakh. Rest of the 18 lakh jobs were lost in urban areas making the overall drop to 1.12 crore.

The proportion of working age population who are willing to work and are either actually working or actively looking for work is defined as the ‘labour participation ratio’. According to CMIE data from 43.57 in December 2017, LPR has come down to 42.47 in 2018. This was 45.15 in December 2016.

Desperate to win elections, the Modi team promised the sky in the run up to 2014 elections, perhaps emboldened by his success in getting away with reign of murders for so long in Gujarat. While there has been steady worsening of the situation of unemployment, the prime minister, adept that he is in sloganeering, went ahead to coin such nice sounding phrases like ‘make in India’, ‘digital India’, ‘skill India’, ‘Mudra’ and so on and so forth with virtually no impact on the ground. Therefore, on the eve of the coming elections the much touted ‘demographic dividend’ where youth constitute an overwhelming majority of the population, threatened to turn out as ‘demographic demons’ for the ruling party!


The structural weakness of producing jobless growth has continued with ever greater viciousness and aggression because slogans not withstanding growth in employment required a sober appraisal of the ground reality, not to speak of a conscious and well directed intervention by the State to address this crisis.

The growing inequality and lack of jobs have compounded the slackening of economic demand which could create the ground for investment and in turn, new jobs. The agrarian crisis demanded public investment through schemes like MGNREGA. However, as a public appeal by parliamentarians and activists to the PM states, “Despite repeated public statements by your government promising employment and job creation that will boost the country’s growth; we are alarmed to note that the country’s only employment guarantee is being systematically undermined. Illegal restrictions on its budget allocation, severe payment delays and low wages are crippling the programme and depriving people in distress of one of their most important legally supported structures”. The overall bleak agrarian scenario with the record slump in prices this time, agricultural growth is slated to come down further.

To expect that private investment alone will take care of employment generation has come a cropper, because without demand new investment has not ventured in the risk prone economic environment. This could have only changed with specific well directed public investment. But neo liberal orthodoxy has only been sought to be camouflaged by rhetoric. The latest figure for a crash of manufacturing index thoroughly betrays the depth of the crisis.

Could ‘Digital India’, ‘Skill India’ or ‘Start up India’ succeed in such atmosphere? The love for cronies has seen huge leakage of public money and large scale privatisation and erosion of premiere PSUs like HAL and ONGC. How such brazen cronyism has actually resulted in the abandoning of ‘make in India’ in Rafale deal is now there for all to see!

But the biggest damage has been struck by demonetization. With 94 percent of our working population in the unorganized and the informal sectors of the economy, cash is the major lubricant. With 86 percent of the cash withdrawn in one swoop, it broke the back of this sector and accounted for loss of almost 3.5 million jobs according to the CMIE estimate. Notwithstanding the structural constraints, the Labour Bureau report which was not released shows that unemployment rate hit a four year high of 3.9 percent in 2016-17 compared to 3.7 percent in 2015-16 and 3.4 percent in 2013-14 clearly reflecting the damage made by the PMs fateful announcement on the evening of November 8, 2016.

Digital India, start up India or smart cities may sound attractive but cannot produce results in the constraints of the overall economic distress that the country suffers from. In fact, the huge budget spending for the advertisement and publicity blitz, have aggravated the situation!


Amit Shah, the chief propagandist had once claimed that more than seven crore of Mudra loans of Rs 10 lakh were made available. But RBI data showed that credit growth was 20 percent and 7.7 percent respectively in 2015-16 and 2016-17 (post Mudra) is around the same level or less than the pre-Mudra levels. So Shah was just re-categorising, re-branding an inventive renaming while making tall claims which were essentially a counting error at best!

That the government continues in the same mould is clear from the latest constitution amendment on 10 percent reservation for jobs for the unreserved categories of people. With jobs coming down and LPR plunging, income ceiling raised to Rs 66,000 per month for being eligible to avail the reservation, nothing could betray further the government’s pathetic performance on the question of employment.

This is the greatest jumla that the young people have seen so far from the present government. Amit Shah in his unique bombast claimed that millions of young people from the forward communities have been blessed by the prime minister’s vision! No doubt, this will come back to haunt the perpetrators of this cruel hoax!