The Jobscape

The Answer is Blockchain

This is the third edition of The Jobscape, our fortnightly round-up of news and opinion on the state of employment and job creation in India. In this edition, Industry 4.0 holds a lot of hope for the future of jobs.

Job Creations News

We start with the good news. It’s festival season, and as always, an auspicious time for job seekers. Domestic mail and package delivery companies are on a festival season hiring spree and hope to hire between fifty to seventy-five thousand workers.

Healthcare may be the next new job-creating bonanza. The CEO of the Pradhan Mantri Jan Arogya Yojana declares that the new Ayushman Bharat scheme will create 1 million jobs in the health and insurance sectors.

IKEA is investing Rs. 20 Million for its new store in Bangalore, which will employ 2,500 workers directly, and many more indirectly from their suppliers and the value chain.

CDC Group, a development sector venture capitalist firm, is an investor in 300 Indian companies, which in turn employ more than 350,000 people. CDC’s main aim is to “support growth and jobs that lift people out of poverty.”

In what may be the world’s largest recruitment drive, 2.37 crore applicants are vying for 1.2 lakh railway jobs. In one center in Noida, UP, the entrance test is given in three shifts every day with 3,450 applicants per shift. These started on 17 September and will continue well into December.

Human Capital Development and Education

India has a dreadful human capital development score which affects worker productivity in the long run. “The World Bank recently released its report on the Global Human Capital Index rankings, where India currently ranks 115th out of 157 nations (China being 46th, Indonesia 87th, Malaysia 55th). According to the index scores from the report, a child born in India is likely to be only 44% productive when (s)he grows up, if (s)he receives education and adequate healthcare.” Mohit Satyanand discusses the report in a short blog post here.

Infosys will double the salary for freshers with “niche coding skills”, as these freshers do not need extensive training, highlighting the issues we have in our education system

There are more than fifty thousand AI and data science job vacancies in India. This, once again, demonstrates the gap between education offered by colleges and skills demanded by the workplace.

Technology, Artificial Intelligence and the Future of Jobs

What will the future of jobs bring? Can we scale up the skill sets of 300 million workers and train 100 million new workers by 2022 to keep up with technological innovations? We may well need very human skills to power the future of AI.

The answer to everything is blockchain and the Prime Minster seems to agree that it will, along with AI and other technologies, change the future of jobs in India and “double the income of 115 million farmers.” It’ll need to: India’s shrinking farm size is making it difficult for farmers to generate enough income to feed their families and we require to create more non-farm jobs.

The Prime Minister is confident that Industry 4.0 or the Fourth Industrial Revolution, powered by technology, will change the nature of jobs. India’s tele-density has increased to 93%, nearly half a billion Indians have mobile phones, in 2014 only 59 panchayats were connected with optic fibre while at present 1 lakh are connected. AI could increase India’s GDP by $1 to 3 trillion by 2030.

But Industry 4.0 may have a negative effect on senior employees who have not upgraded their skills. IT firms are grappling with new technologies and an ageing staff and may be gearing up to retrench older employees.

In our fun segment, the latest new tech job is that of a drone pilot. “A FICCI and EY report noted that the Indian unmanned aerial vehicle (UAS) market will touch $885.7 million by 2021.” This is one pilot job where the pilot gets to stay on the ground and only the “aircraft” flies!

News from the states

Andhra Pradesh Chief Minister Chandrababu Naidu exhorts students in his state to become “job-givers, not job-seekers.” More power to him! After all, his state tops the ranking in ease of doing business in India. In comparison, Punjab ranks 20th, and its Chief Minister is busy regularising temporary jobs to permanent government jobs – perhaps he should take a leaf out of Mr Naidu’s book and instead create an atmosphere for entrepreneurs and the market to generate jobs. To improve skilling and make students more employable, the government of Goa has launched a training academy in coordination with Cipla, a pharma company.

Jammu and Kashmir state government is putting its money behind micro industries and hopes to create 9,000 jobs for youth in Srinagar by establishing 1,500 village industrial units. In Haryana, the government is setting up a railway coach refurbishment factory which hopes to create 10,000 jobs

India’s first tribal employment exchange and career development center has opened in Kerala, with plans for opening more. Meanwhile, in Patna, the government has opened a portal for assembly jobs. Alas, that’s not the manufacturing assembly line, the portal is for jobs in the legislative assembly!

In Telangana, the prisons department held a recruitment drive, helping rehabilitate 235 ex-prisoners by connecting them with companies including Flipkart, Karvy and HDFC.

As five states go to the polls later this year, the issue of jobs keeps coming up. The availability (or lack of) jobs is a key concern in the upcoming elections in Chhattisgarh. “According to official figures, 2.5 million people have registered with various employment exchanges in Chhattisgarh.” Countering opposition claims of poor job creation, the BJP in Rajasthan says 16 lakh jobs have been created in handloom and skilled sectors. In what may be a blatant move to attract votes, Amit Shah of the BJP blames the outsider for job losses in India during an election rally in Madhya Pradesh. Perhaps he should look inside instead and review the record of the BJP government. The Times of India took a stand against demonizing migrants.

And finally, labour unrests in Chennai and Gurugram may stunt growth in manufacturing jobs.

Entrepreneurship

How does one convert scientific research into commercial products and help scientists and PhD scholars become entrepreneurs creating jobs? According to Kishore M Paknikar, director, MACS-Agharkar Research Institute (ARI), “Commercialisation of inventions remains a big challenge in India.” But there’s hope. The Carbon Zero Challenge at IIT Madras is training students to solve environmental problems and then helps them create start-up companies to monetize their ideas.

Subroto Bagchi of the Odisha Skill Development Authority thinks India needs “nano-unicorns – people who will develop a skill and start a business in a tiny village or a taluk and in 12-18 months, this business will employ people on a part-time basis.” Perhaps a million nano-unicorns to start with?

The global consulting firm, McKinsey and Company, has a different view, eschewing “nano-unicorns”. The McKinsey Global Institute’s report on high growth emerging economies looks at large companies (with annual revenues of at least $500 million) as drivers of growth and job creation.

According to NASSCOM, only 8 to 10% of Indian entrepreneurs are women. Facebook and Google, among others, have started mentorship and support programs for women entrepreneurs. There a lot of room for improvement and advancement. Facebook’s research showed that only 2% of funds raised by Indian startups in 2017 went to female founders. 

Discrimination

Women have a tough job just getting a job! A World Economic Forum study finds out that one in three companies in India prefers hiring men, and only one in ten companies said that they wanted to hire more women.

It’s not just women who are discriminated against. Last time we threw light on discrimination faced by scheduled castes, scheduled tribes and Muslims. This time, we look at people on LGBTQ spectrum and the differently abled.

Although there has been an improvement in perceptions after Section 377 was decriminalized, there’s a long way to go.

There are clear indications that corridors of India Inc. are becoming more welcoming for LGBTQ people. But HR experts, gay rights activists and academics say it will take years for true inclusivity to happen on this front, particularly in traditional Indian organisations.

There is a serious lack of jobs for transgender people in India. Prospects may been looking up however – Ola Cabs has a transgender cabbie in Bhubaneshwar. It’s just one job, but hopefully it can open more doors for LGBTQ members.

For the differently abled, getting a job is another hurdle, especially in corporate India even where there are progressive hiring policies. Persons with disabilities account for a scant 0.6% of the corporate workforce. Here’s a fact check on what the government has done for people with disabilities or divyangs, the term preferred by PM Modi. There’s always hope, with NGOs running programs like ‘Enable vaani’ to help the differently abled.

Systemic issues

Is a flawed system in India to blame for a lack of job opportunities? The Indian National Association of the Club of Rome (CoR) recommends “concerted efforts from policy makers and businesses to leverage technology and innovation.”

One of the major systemic shocks to the economy in the last few years was demonetisation of India’s currency. It was supposed to weed out corruption and black money, but it had a serious effect on other parts of the economy. According to Mahesh Vyas of the CMIE, “Demonetisation may have caused job losses of at least 3.5 million. The note ban also hit the participation of young people in the labour force and hurt women more than men.”

Some policy experts advocate raising minimum wages/ giving a “living wage” to workers. Unfortunately, it will have unintended consequence of jobs lost. Raising the minimum wage in India would have largely negative outcomes. It would be positive for existing minimum wage workers, but low-wage hiring in firms decreases by about 5% following a 10% increase in the minimum wage. This decline in low-wage employment is quick, occurring within the first quarter after a minimum wage increase.

Job seekers value stability, not just wages or even increasing wages. For them career growth is more important than just a salary.

News from the Central Bank

The Reserve Bank of India’s consumer confidence survey showed that households are pessimistic on the current situation on employment. And Bimal Jalan, the former governor of RBI advises the government to focus on job creation.

Jobs data

The issues with jobs data continue to stay in the news. London’s Financial Times finds it difficult to evaluate PM Modi’s job promises, largely because of dodgy data. And there’s more evidence for jobs data fudging.

In the absence of regular government statistics, CMIE has been doing a stellar job in providing data on the employment situation in India. Their latest report shows that jobs offers increased in September 2018 and the labour force participation rate increased to 43.2%, the highest in the current fiscal year.  However, in a shocking development, India’s female labour force participation has fallen to a low of 10.65% in the period May-August 2018. Despite job offers increasing recently, Mahesh Vyas of CMIE claims that NSSO data projections show that jobs growth is slowing.

The issue has become a political football with MPs from the ruling party blocking a report on GDP growth because it may show that the government has not created the number of jobs promised by PM Modi.

The government task force set up to review employment information (now headed by TCA Anant) needs more time to reconcile the discrepancies in jobs data from different sources. Radhicka Kapoor has recommendations for the government task force to revamp the employment data architecture, to improve the frequency of data reporting, as well as give insights into the quality of employment.

Ghosh & Ghosh critique the State of Working India jobs report. To add some spice, they also  trash the government’s Quarterly Employment Survey (QES), in favor of administrative data including that from the EPFO. Mahesh Vyas rebuts Ghosh & Ghosh’s critique, giving a detailed explanation of the data and sources used in the SWI report. In turn, he accuses Ghosh & Ghosh of “tilting at the windmills by suggesting that the EPFO data are being dismissed for “pecuniary gains”.” We doubt we’ve heard the last of this.

For more on India’s jobs crisis, follow the 20 Million Jobs project on Twitter at @20Mjobs.

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About the author

Yazad Jal

Yazad Jal is Fellow, Economic Policy at the Takshashila Institution.
Previously he worked for McKinsey and IBM in the United States and
before that in the non-profit sector in India, last serving as CEO of
Praja Foundation in Mumbai. Yazad has an MBA from Yale University and
a BA (Econ) from St. Xavier’s College, Mumbai University.