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1. State of Working India 2019 is being published close on the heels of the 2018 report. The principal reason is that this year’s report aims to intervene in the debate over employment generation in time for the general elections to be conducted in April and May 2019. In this report we present an update on the jobs situation for the period between 2016 and 2018, and also present some ideas for employment generation.
2. The recent controversy over employment statistics should be seen in the context of the fact there is now a fully established politics of unemployment in India. This is a new development that needs to be understood. The politics of unemployment is typically a feature of middle-to-high income countries, not low-to-middle income countries. Traditionally, the principal economic issue of broad spectrum political significance in India has been poverty, not unemployment.
3. There have been some new developments, which when juxtaposed with older structural and cultural factors, can account for why this is happening in India, a lower middle income country with a per capita GDP one third that of China and half that of Indonesia. The ‘precocious’ part of the Indian labour market that resembles higher income countries, that has always been there to a limited extent, is now substantial and rapidly rising, and more to the point, it has spread throughout the country, including the rural areas. This has laid the material basis for a widespread politics of unemployment.
4. Without any claim to being a complete list, we discuss seven key factors on the supply side of the labour market and two crucial demand side factors that together contribute to the crisis. On the supply side we have high growth rates and aspirations, the youth bulge, the education wave, the dominance of ‘general’ degrees, sub-standard degrees, and continued relevance of caste and gender based rigidities. On the demand side we have the collapse of public sector employment and inability of the private sector to create adequate good jobs due to contractualisation and automation.
5. The foregoing factors are clear to all observers of the Indian economy. The question is, of course, what can be done? Several long-term and short-term measures which face these structural conditions as they exist currently, are needed. Public action and spending should be strong elements of all these measures.
6. The report details four policy measures for addressing the crisis. In Chapter Three, Strengthening Towns through Sustainable Employment: A Job Guarantee Programme for Urban India, we propose a programme that calls for providing 100 days of guaranteed work at D500 a day for a variety of works in small towns. It also provides for 150 contiguous days of training-and-apprenticeship at a stipend of D13,000 per month for educated youth. In Chapter Four, Creating Good Jobs through a Universal Basic Services Programme, we argue that a well-executed UBS would go a long way in restoring public goods to their rightful place in society, creating decent work in the process. Chapter Five, How to Revive Indian Manufacturing: On the Need for Industrial Policy, by Jayan Jose Thomas discusses the renewed interest in, and continued relevance of industrial policy. Srinivas Thiruvadanthai in Chapter Six, Using Fiscal Policy to Alleviate the Job Crisis, argues that there is ample fiscal space to address the criss via public spending.
7. India is at a crucial juncture in its economic development where timely public investment and public policy can reap huge rewards. At the same time, being in denial about the current realities and missing this window of opportunity can have large negative consequences in social and economic terms. Let us act together to ensure that it is the first eventuality that comes to pass.
Microenterprises have been the engines of job growth in the majority of dynamic economies. India is home to thousands of microenterprise clusters as well as millions of distributed entrepreneurs who can become job creators. Fostering of such mass-entrepreneurship is key to addressing India’s employment challenge.
Case studies of clusters in general, and of women entrepreneurs in particular, show that if key factors such as collective action, infrastructure, credit, and market linkages are in place, returns to entrepreneurship are vastly improved. Inspirational stories are also emerging in the use of fourth industrial revolution technologies to improve access to markets and enter global value chains in a way that awards greater agency to women entrepreneurs.
Our aim in this report is to provide information and analysis that can assist policy-makers and the microentrepreneurial ecosystem at large to develop tools required to help this sector flourish. The study looks at non-farm microenterprises that employ less than 20 workers. We analyse various dimensions such as geographical distribution, demographics, gender (employment and enterprise ownership), industrial distribution, labour productivity, and wages. The analysis is based on Economic Census and National Sample Survey data.