Opinion The Jobscape

Where Are the Jobs?

This is the seventh edition of The Jobscape, our weekly round-up of news and opinion on the state of employment and job creation in India. In this edition, we look at the jobs mantra during elections, the eternal promise of reservations, trade wars, Brexit, and Facebook trying to wash away its sins.

Job Creation News

In 2017, India produced 225 million mobile phones, worth $20 billion, almost all for the domestic market. If the industry focuses on exports, by 2025 it could manufacture around 1.2 billion handsets worth $230 billion creating 4.7 million jobs in the process.

India is poised to create one million jobs in cloud computing by 2022. The domestic cloud computing market is expected to double in size from $2.2 billion to $4 billion by 2022.

Last month we discussed the downturn in the telecom sector resulting in the loss of around 65,000 jobs. Paul Dupuis, MD and CEO of Randstand India, a placement agency, damped down these fears and called the crisis an evolution and stated that once 5G becomes a reality, jobs will grow in the sector.

Global renewable energy jobs are increasing at 5.3% year on year. India, with a shade under half a million jobs in the sector, has a lot of potential for growth – China has nearly 4 million jobs in renewable energy.

If your regular day job doesn’t pay you enough, moonlighting can earn you a tidy extra income—between Rs 20,000 to 1 lakh per month. But there are some pitfalls, and job frauds abound in the work-from-home sector.

State Elections and the Jobs Mantra

In election news, it’s the BJP’s turn to promise jobs, 1 million jobs in Madhya Pradesh to be exact, in its “Drishti Patra”, which was released last Saturday.

We know employment was a key issue in the recently concluded Chhattisgarh elections (results will be out only in December). According to CMIE, Chhattisgarh’s unemployment was the sixth highest in the country.

After all the political manifestos, we have, in Telangana, a youth manifesto, which is more like a charter of demands: demanding jobs but eschewing freebies like unemployment stipends. Staying in Telangana, the new mantra for politicians is “promise them jobs and the votes will come.” Akbaruddin Owaisi proposes a quid-pro-quo: make him Chief Minister and he will provide jobs.

Of course, once they’re elected, it’s a different story: while the common Indian toils all year, our MPs and MLAs work for approximately one month a year – and they make sure to increase their salaries in that short period of time!

The Eternal Promise of Reservations

Job reservation is an evergreen topic in Indian politics. Maharashtra state’s cabinet has decided to grant job reservations to Marathas. A bill to implement this will be tabled during the winter session of the assembly. Marathas account for approximately 1/3rd of the state’s population, and this reservation will be on top of the SC/ST/OBC reservations, bringing the total reserved quota up to 68%. Without doubt, this is terrible policy as the government should focus on creating more jobs, increasing the pie, instead of simply dividing the existing pie by giving out reservations.

Luckily, this is not yet a done deal, and hurdles remain. There are various claims: at one end rural Marathas seem to be hit worst by the state’s agrarian crisis and on the other side Marathas are categorized as a politically empowered class. Regardless of where you stand, this reservation is already having a domino effect – the Gujarat Chief Minister is studying it, with the intention of similar reservations for the Patidar community in Gujarat.

In Jharkhand, cadets from the National Cadet Corps (NCC) were given the promise of job reservations by their Chief Minister, himself an NCC cadet during his college years.

Structural and Macroeconomic Issues

What does India needs to do to become Asia’s next big manufacturing hub? Pradeep S Mehta and Surendar Singh of CUTS International propose specific and substantial structural reforms which will create new job opportunities and arrest high unemployment among Indian youth.

The fixed term employment rules introduced by the government in March 2018 have been controversial, even with the RSS backed Bhartiya Mazdoor Sangh. A new article extols them, claiming that they will lead to greater job creation in India’s formal sector.

MGNREGA is cannibalizing jobs from other sectors. Darjeeling tea estates have to compete with it for workers. MGNREGA was created to help areas with unemployment, not be just another source for wages.

According to TeamLease services, net employment outlook for India has dropped by 3%, bringing it down to 92% for the October-March 2018-19 period.

Employability of fresh graduates in India has been a big problem—with only 52% of engineering graduates being job ready. However, MBA’s have it worse, with a 3% year on year drop in employability from 2017 to 2018.

Women and Vulnerability

The space for working women in India is shrinking – according to the ILO, India in 2030 may have fewer working women than it did in 2005, despite a 44% increase in female working age population. We know that India’s female labour-force-participation rate has dropped precipitously and may be as low as 10.65% today. A new study has found that the reasons behind this could be the increasing income from the husband. Women with higher education rates drop out of the labour force at a lower level even when their husband’s income increases.

An important aspect of a job is the stability it brings. Jobs with increasing vulnerability defeat an important reason of having a job. A new report by the International Labour Organization (ILO) predicts that nearly half of all workers in Asia Pacific region will be engaged in “vulnerable employment” by 2020. The situation is worse in India, with 82.2% of those employed being vulnerable as per data of 2010 and 41% of Indian employees feel that they’re poorly paid.

China and Trade Wars

Despite frictions at the foreign policy level, good relations with China make good economic sense for India. China is India’s largest trading partner with a bilateral trade volume of $84 billion. And over 1,000 Chinese companies are doing business in India, creating more than 1 lakh jobs.

The US-China trade war may have some beneficial impact on India. With over 5,000 Chinese products facing stiff tariffs, Indian products may get an entry into the US and European markets, leading to job creation in India. Will this lead to a manufacturing revival in India? According to professional services firm Deloitte, India’s manufacturing sector has the potential to create 90 million new jobs by 2025.

Exporting Jobs

There is a lot of discussion about Brexit and how it would help India and promote Indian jobs in the UK, now that EU citizens would no longer have preference. First Post throws some cold water on this optimism: “On 19 November, May said, ‘Software developers from Delhi’ would no longer lose out to EU nationals when it comes to British jobs. Perhaps. But with the vote for Brexit at least partially cast on the issue of keeping foreigners out of the country, how realistic is it to expect Brexit Britain to enthusiastically solicit visually distinct, South Asian workers? Brexit supporters were opposed to white, Christian, European foreign workers. They are hardly likely to welcome – let alone support government endorsement of – brown, mostly non-Christian Indians.”

In our previous edition we mentioned how spouses of H1-B workers in the US might lose their job authorization. Two Democratic Congresswomen from California have introduced a bill to protect work authorization for spouses of H1-B workers. But this may go nowhere given that the Senate and the White House are controlled by Republicans. And now there’s bad news even for the main visa holder. The USCIS is tightening its rules, making it tougher to get that coveted H1-B visa. Despite all this gloom and doom, US companies are still trekking to India for talent. 

Other stories

Taking a dip in the holy Ganges is supposed to wash away your sins. Hoping to wash away all the negative press it’s been getting recently, Facebook is taking a metaphorical dip in social service, planning to train five million Indians in digital skills in the next three years.

After coming out with the top jobs in India, LinkedIn has come out with a study listing which Indian cities offer the best job opportunities (i.e. the most lucrative pay packages). My adopted city of Bengaluru tops the list. Woohoo!

On November 9, we indicated that the Pradhan Mantri Rozgar Protsahan Yojana (PMRPY)’s claim of jobs created may be too good to be true. The Quint agrees and states that the jobs claimed might not be new jobs.

India’s services sector boom has been impressive in terms of economic growth, but tepid in creating jobs.

And finally, the upcoming data localization bill may affect both wages and jobs.

For more on India’s jobs crisis, follow our twitter handle @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.