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On the 25th of March 2020, the Prime Minister, Mr. Narendra Modi, announced a nationwide lockdown to stem the spread of the novel Coronavirus, COVID-19. The decision, while imminent, was unplanned and unilaterally made without any consultation with the state governments. This has consequently caught millions of migrant workers and the bureaucracy off-guard, leaving them no time to plan for such an emergency. While millions of migrants successfully reached their home states, only to be quarantined in camps, many remain stranded far from home, with no money or food. We are therefore confronting a lethal combination of crises: health, hunger, sanitation, and trauma, both physical and psychological.
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.
India is one of the world’s fastest growing economies. To be a stable and prosperous democracy, this growth must be accompanied by the creation of meaningful, secure and remunerative employment. Realising this goal requires a grounded and comprehensive overview of the state of labour markets, employment generation, demographic challenges and the nature of growth.
The State of Working India (SWI) is envisioned as a regular publication that delivers well-researched, analytically useful information on India’s labour market, by bringing together researchers, journalists, civil society activists, and policymakers interested in labour and employment issues.
The report is based on the research of CSE staff, as well as on background papers which are available online. SWI conceives of India’s ongoing structural transformation as composed of two processes — movement of workers from agriculture to non-farm occupations (the Kuznets process) and from informal activities to formal ones (the Lewis process). But it adds crucial considerations of social equity and ecological sustainability to this standard framework. In the 21st century, Lewis and Kuznets have to meet Ambedkar and Gandhi.
When the pandemic hit, the Indian economy was already in the most prolonged slowdown in recent decades. On top of this, there were legacy problems such as a slow rate of job creation and lack of political commitment to improving working conditions which trapped a large section of the workforce without access to any employment security or social protection.
The pandemic has further increased informality and led to a severe decline in earnings for the majority of workers resulting in a sudden increase in poverty. Women and younger workers have been disproportionately affected. Government relief has helped avoid the most severe forms of distress, but the reach of support measures is incomplete, leaving out some of the most vulnerable workers and households.