The Jobscape

Forget Job Creation, India is LOSING Jobs

This is the eighth 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 lost jobs , the new reservations, sexism and much more.

Job destruction news

We generally start with good news, but this is the most important news on the jobs front this month, and perhaps this year. It’s shocking and it comes from a trusted source: CMIE. India lost 11 million jobs in 2018. Yes, lost jobs. Instead of creating jobs, the Indian economy lost 11 million jobs. Rural India (9.1 million jobs lost) and women (8.8 million jobs lost) bore the brunt of the job losses. Not surprisingly, the unemployment rate hit a 27 month high of 7.4% in December.

There are many stories of job loss. Here’s one: Pfizer India is cutting 1,700 jobs, largely because of its inability to maintain regulatory compliance with the US FDA.

Our jobs situation is so dire that engineering graduates are working in criminal call centres,  perpetuating scams on innocent people around the world. One more example of jobs we don’t need and definitely don’t recommend.

If all this is too depressing, for a spot of humour, we find that India’s best jobs include cow protectors, psephologists, wedding planners (and, evidently, sarcasm writers).

Job creation news

Not all the news is gloomy. The Sports Authority of India is hiring former Olympians and Paralympians as coaches. It’s a small start with only 14 jobs offered, but it’s good to know that a career in sports is a possibility in India.

Tech companies continue to create jobs. HTC Global Services, an IT consulting firm is planning to hire 3000 people. Uber India is hiring up to 500 engineers, hoping to double the size of their product and engineering team in the next year.

State run energy companies in India are hiring, and facing talent deficiencies. The Oil and Natural Gas Commission (ONGC) has 422 vacancies for technical jobs. Coal India had a hiring freeze from 1993 to 2007. This has led to a depleted bench of executives and now they are facing problems as they do not have experienced executives to take over as General Managers, once the current crop retires.

Air India’s budget airline, Air India Express is looking for cabin crew and pilots. And if you’re looking for a government job in insurance, New India Assurance is recruiting for 319 posts in 2019.

Reservations

As if India did not have enough reservations for government jobs, the BJP recently got parliament to approve 10% reservations for economically backward upper castes. States like Bihar are also jumping on to this new quota bandwagon. This policy is being criticized for being an election gimmick ahead of the 2019 general elections and shines a light on PM Modi’s lack of progress on his “10 million jobs per year” promise. Commentators like Vivek Kaul deride the new policy thus: “10% of zero is still zero.

Implementing this reservation may not be an easy task — nearly 3 million posts are lying vacant across the central and state governments. 10% of these could, in theory, be filled in immediately with the new reservation. But these jobs have been lying vacant for years for a reason — there are few takers for them. Additionally, even setting the bar for “creamy layers” is a demanding job. To add more confusion about its implementation, a Public Interest Litigation (PIL) has been filed in the Supreme Court challenging the new quota law.

On a more general note, it seems that benefits from reservations are seriously skewed. A consultation paper prepared by the Commission to Examine Sub-Categorisation of OBCs shows that just 48 OBC sub castes (out of 2,633 total) garner 50% of the benefits while 983 sub castes (37%) get zero benefits – zero jobs, zero seats in educational institutions.

The government’s stranglehold on agriculture via price controls has so corroded the sector that everybody suffers from the farmers to consumers buying produce. The agricultural crisis has worsened our already bad jobs situation with demands for job reservations now coming from land-owning non-backward castes like Jats, Patidars and Marathas.

An insidious way of calling for reservations without using the term “reservation” is to demand that “locals should get priority for jobs.” Here’s one more example with the MNS issuing that call for Metro jobs.

Jobs for women

One more shameful statistic: 40% of female engineers in India don’t have a job due to rampant sexism. And it’s hurting the bottom line. India could increase its GDP by 27% if the employment rate for female engineers matched the rate for male engineers.

More shame from Indian Railways. First, out of its 1.3 million employees, barely 2-3% are women. In addition to that, it has announced that for certain jobs it only wants men, citing “tough and unfavourable working conditions.”

How do we improve India’s abysmal female labour participation rate? One answer may be in better transportation facilities. Women have a major “first-last mile” problem getting to and from the train station / bus stop. Would a reimagined, futuristic autorickshaw be the solution?

The fashion entrepreneur Shannon Keith is fighting sex trafficking and helping create jobs for women in India with her pajamas and loungewear line.

News from the states

The Gujarat model has been touted for years as creating a business friendly environment and boosting economic growth. A new book critically examines that record and finds it lacking. The model was capital intensive leading to a fall in Gujarat’s annual employment growth from 2.4% to 0.1%. Apart from that, the quality of jobs and wages declined as well, leading to immense pressure on government jobs. Last year, for 27,767 government jobs announced in Gujarat, there were 8.1 million applications, an average of 292 candidates for every job. If the Prime Minister’s home state is struggling, what hope is there for other states and their job seekers?

Jharkhand’s unemployment rate, as per CMIE, is 13.6%, nearly double the national average of 7.8%. Then state government is holding a global skills summitand will distribute job offer letters to 100,000 youth. Hope it helps!

Bans on cow slaughter have an unintended consequence: loss of jobs, as this example from Haryana shows us. The state government in Haryana seems to be making a hash even of a simple program like the MGNREGA. There are some districts where as few as 26 families were given employment in 2017-18, compared to 570 families in 2013-14.

Odisha’s state level single window clearance authority cleared investment proposals worth Rs. 11.77 billion, which will create over 6,000 jobs. In other state investment news, Indonesian pulp and paper giant APP is setting up probably the world’s largest paper mill in Andhra Pradesh, valued at Rs. 24.5 billion, creating 15,000 jobs.

Punjab’s Chief Minister wants to fill up 120,000 government jobsas soon as possible. Staying in Punjab, the HuffPost has an investigative piece on how the PM’s “Stree Swabhiman” (women’s self-respect) scheme has backfired and led to women becoming indebted.

Data debates

Lord Meghnad Desai thinks that India may be undercounting jobs—he discounts “jobless growth” and states that 7% growth cannot happen without creating jobs. He may or may not be right, but on one thing he’s 100% on the ball—the deplorable state of Indian statistics!

The Ministry of Statistics & Programme Implementation (Mospi) is planning to hire 1.25 million data enumerators to map, across 250,000 villages, the informal and unorganized sector which accounts for almost 400 million jobs in India. The data obtained would be a great help in improving India’s job statistics.

Surjit Bhalla, formerly of the PM’s Economic Advisory Council, opines that India needs less than 5 million jobs a year. This has been heavily criticized, starting with Santosh Mehrotra and Jajati Parida who take us through the numberscarefully dissecting Bhalla’s arguments. Deepanshu Mohan details four reasons why Bhalla is wrong, from household data gaps to the divergence between unorganized, informal workforce and the organized, formal economy.

Job vulnerability

58% of jobs in Ahmedabad are casual jobs, with no fixed income or social security according to an extensive study done by CEPT University. The high level of job vulnerability in a state which is known for its advanced economy is disheartening and shows that regardless of how developed and industrialised the city or state is, vulnerability is a key concern.

On the other side of the vulnerability debate are jobs in the gig economy, where Indians choose to work in the part-time/ freelance project world because of the flexibility and freedom it offers.

Jobs abroad

Indians may be scrounging around looking for jobs in India and having to deal with vulnerability, but Indians abroad are doing great, with the diaspora set to send remittances worth $80 billion back to the homeland, more than any other country, including China.

The Gulf states, once a beacon of hope for Indians looking for jobs abroad may no longer be so. In the UAE, job titles have shrunk from 3,000 to just 726. Migration to the Gulf for jobs has fallen 62% in the last five years.

Quite often, a lot of noise is made when jobs are outsourced to India, but often the actual number of jobs is quite low. A case in point is the recent news of Deutsche Bank outsourcing jobs from Florida to India. A closer reading shows that the total number of jobs moved is 60 (or 0.06% of Deutsche Bank’s approximately 97,000 employees worldwide).

Companies outsourcing don’t have it easy—IBM is being sued, by a former employee, in the United States over its plans to move jobs to India. If this litigation succeeds, we may see fewer jobs coming to India.

Artificial Intelligence and start-ups

AI is the mantra. The job site Indeed.com reports a 179% increase in AI related job searches between 2016 and 2018. In AI applications for the automotive sector, India is third globally behind the US and China.

Bob Tapscott of the Blockchain Research Institute thinks that India has the potential to lead the blockchain revolution, creating jobs and mitigating the negative effects of AI.

Shashi Tharoor, MP from Thiruvananthapuram gets it. According to him, “jobs that are non-existent today will be career options by 2030”.

The Union Minister for Commerce and Industry, Suresh Prabhu, was in Goa mouthing platitudes on how start-ups create “real” jobs. Of course they do. The “real” issue is how many jobs are they going to create, when India’s deficiency is not a few hundred or thousand, but 20 million jobs.

Can you have it all? Run a business, do social good and also create jobs? Impact investing, where businesses invest in solutions like affordable healthcare or financial inclusion, has the potential to create 8-12 times more jobs per million dollars invested compared to other business ventures.

Where are the jobs?

We’re still asking and receiving no answers. But more voices are being added to those questioning the government, from Yashwant Sinha, the former BJP finance minister to Chirag Paswan of the Lok Janshakti Party in Bihar. The Pioneer and DNA India chime in as well.

Other stories

At the macro level, what skills are required to mitigate India’s jobs crisis? Nitin Pai makes a case for philosophy, in addition to English and Economics!

Finally, we indulge in a bit of navel gazing.The Washington Post copies a headline from the very first Jobscape, published last September. India’s jobs crisis is international news!

For more on India’s jobs crisis, follow our twitter handle @20Mjobs.

Please share

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.