The India growth story might be intact, but there is something that may still trip it up. The lack of jobs.
“Even if India grows, it is not translating into mass employment that it desperately needs,” said Sunil Kumar Sinha, chief economist at India Ratings. “The organised sector can spend for productive employment whereas the requirement of the job market is much larger—a large part of it was catered by the unorganised sector and MSMEs, which are not in a position to provide that right now.”
Consistent shocks to the unorganised sector, from demonetisation to GST to Covid lockdown, have affected creation of jobs in the informal economy. According to data by the Centre for Monitoring Indian Economy (CMIE), manufacturing jobs went down from five crore to three crore in the past six years.
Private sector employment propped up the consumer economy since the liberalisation of the economy in the 1990s. But that is shrinking, and young jobseekers are now desperately seeking government jobs. Reconfiguring of the safety nets inherent in the public sector, as recently seen in the reaction to Agniveer scheme, has led to violent protests.
The increasing worry is that a K-shaped recovery, with one class flourishing and the larger masses languishing in uncertainty, could turn out to be a powder keg. As Mahindra group chairman Anand Mahindra said in August at the company’s general body meeting, “With one of the largest youthful populations in the world, it is easy to imagine the potential for social unrest if jobs do not grow along with the youthful population.”