February 13, 2022

The Explosion is Building Up

Nilotpal Basu

THIS was waiting to happen. From disquiet to unrest; the explosion raged across Bihar and Uttar Pradesh in January. The trigger was the huge anomalies that surfaced on the announcement of results by the Railway Recruitment Board (RRB) on non-technical popular categories (NTPC). The tests were in the first place,  held in 2019 following the relentless pressure of potential candidates. But, the publication of results had a message of betrayal and the RRB seems to have reneged on earlier assurances and the list did not have the numbers that were promised.

The depth of emotions and the intensity of the employment crises was apparent; 1.17 crore applicants for 35,000 vacancies.

The devastation of the economy in the middle of the pandemic has assumed gigantic proportions. Not that the pandemic, ‘broke’ the employment opportunities, but the pandemic exposed really ‘how broken the system was’! In fact, employment was constantly suffering a downslide even in the time preceding the outbreak of the pandemic. The pandemic and the consequent lockdown virtually brought the whole system to a standstill.


Providing 2 crore jobs annually was a signature tune for Narendra Modi’s 2014 election campaign. Not only has it remained unfulfilled but in the process, the demographic advantage of having more than two-thirds of its 1.35 billion people being in the working-age is simply vanishing. Even the government’s own reports are confirming this bleak situation. The labour ministry’s career website had more than 13 million active job seekers in December 2021, but only corresponding 2.2 lakh vacancies. The ministry outlined its focus in the parliament in December on small businesses. But the fact is, if overall job creation is weak, then such focus does not address the underlying problem of the economy, constantly reducing investment.

CMIE, the organisation which tracks the employment situation in the country has pointed out repeatedly that India needs more investment in labour-intensive industries and prioritise the induction of more women into the labour force.


Any discerning observer of the pattern in the Indian economy would know that more than 95 per cent of employment in India is in the unorganised and informal sector. It is a truism to point out that much of this was cash transaction-intensive. The abrupt shock of withdrawal of large sums of cash led to a collapse of much of these. It is in the aftermath of such a mindless misadventure, even after the resumption of some degree of normalcy, many such enterprises could not be brought back to life. Between 2018 and 2021, India suffered its longest period of a slowdown since 1991, with unemployment averaging 7.2 per cent as per CMIE data. However, during this period global unemployment averaged around 5.7 per cent.

It is increasingly becoming obvious that the steady decline in growth following demonetisation and unrealistic manner of implementation of GST hit the employment opportunities the hardest. The growth was not fast enough and big enough to generate employment opportunities where annually, 12 million people were reaching employment age. Added to this is the fact that the increase in the workforce for every percentage rise in GDP has been shrinking. This makes it clear that the economy will have to grow at least 10 per cent consistently to raise employment by 1 per cent.


The pandemic accentuated in this bleak background during the pandemic with the abrupt all-pervasive lockdown in the single month of November 2021, 68 lakh salaried people lost their jobs. Nearly 9 crore in urban India were left unemployed which constituted nearly 23 per cent of the youth. The total number of Indians in jobs shrank from 44 crore in 2013 to 41 crores in 2016. This further went down to 40 crores in 2017 and to 38 crores in 2021. Added to this the working-age population grew from 79 crore to 106 crore during the same period. This has led to crores of people into reverse migration to give up looking for jobs in urban India and move towards the villages for sheer survival. No wonder that migrant workers forced into such return during the lockdown and the consequent closures suffered the heat. It is ironic that the prime minister in replying to the debate on the motion of thanks in Lok Sabha has put the blame on these helpless migrant workers for the spread of the virus.

The statistics of labour force participation rate falling from the pre-pandemic 43 per cent to 40 per cent confirms the heart-rending visuals of migrant workers walking for hundreds of kilometres and getting mowed down by moving trains and giant trucks on highways on their way back. The crisis, of course, was more pronounced in its gendered dimension.  Women in the workforce had fallen from 36 per cent in 2013 to 23 per cent by 2018 according to a UNDP report. This suffered a further fall to 18 per cent in 2019 even before the lockdown. Understandably this came down to 9.24 per cent in February 2021.


The employment situation has become so severe largely due to the mere collapse of micro, small and medium enterprises (MSME). From a study conducted on the orders of the MSME ministry that lockdowns imposed during the pandemic pulverised the sector. The study done by the small industries development board of India (SIDBI) sampled 1029 MSMEs spread across 20 states and two union territories. The report submitted on January 27, 2022, shows that 67 per cent of the responded MSMEs were temporarily closed for a period of up to three months and more than 50 per cent of the responded units suffered a decline of more than 25 per cent in their revenues during FY 2021. Around 65 per cent of the respondents reported a decline in profitability due to stable fixed costs with a decline in revenue. The study also revealed that 65 per cent of MSMEs were forced to avail emergency credit lines. The period of intense crisis also showed that while Rs 3,50,000 crore credit was extended, over Rs 5 lakh crore of unpaid dues to the sector remained to be reimbursed. A quick word on the structural deficiency in the design of GST could not be out of place. The implementation of the GST was biased in favour of the formal sector and the informal and unorganised sector was decimated without handholding measures from the government.  This left the MSME sector most vulnerable to the pandemic shock.


In the present Indian context, a redefinition of unemployment is imperative. Employment cannot mean gainful engagement in an absolute sense. Due to conditions of the economy and the sharp intensification of inequality, unemployment is not only that jobs are lost in absolute terms, but incomes are also suffering decline to unsustainable levels. This is particularly true in the unorganised and informal sector. The massive reserve army of the unemployed is ensuring intensification of exploitation through rapid loss of incomes. This is particularly more so in the service sector.


In this overall painful atmosphere, MGNREGS has been providing some relief and succour to those engaged for minimum livelihood support for survival. The MGNREGA was aimed at enhancing the livelihood security of households in rural areas of the country by providing at least 100 days of guaranteed wage employment.

But, the budget papers show that there has been a 25.51 per cent slash from the revised estimates of the current year in the allocation for MGNREGS for 22-23. This is on top of the government’s admission in the parliament that payment of workers’ wages to the tune of Rs 3,360 crore is pending.


With the multiple dimensions of rapid decline not just in absolute employment; but, lack of quality jobs, security of tenure, and the virtual non-existence of social security, the mad rush for secured government jobs are assuming the proportion of desperation.

It is in this background that the prime minister’s obnoxious claim in Lok Sabha debate that there is no crisis in employment underlines a certain note of betrayal. This claim and the attempt to apportion the blame on the opposition for the current mess is surely going to lead to very angry, if not, violent protests.

With the choice of politics of polarisation, hate and division, this is a grave threat to the very existence of the nation and the people. Certain immediate relief measures have become absolutely urgent. Strengthening and expanding the REGA, initiating a similar guaranteed employment scheme for urban areas, comprehensive social security legislation for unorganised and the informal sector should become a rallying point for creating a platform of youth and trade union organisations cutting across political and ideological differences. The experience of the SKM  to beat back the corporate takeover of agriculture should inform the future course of such a democratic and peaceful struggle on the question of employment. The manner of the struggle and the nature of the demands may not be necessarily similar but will depend on the concrete circumstances prevailing in different parts of the country.