Vaccination plan for an ailing Indian economy: Job creation agenda needs a reset

Economic Times, January 29, 2021

By Pradeep S. Mehta and Sarthak Shukla

As we eagerly wait for a historic budget in once-in-a-lifetime situation of Covid-19, the issue of resilience, both economic and societal, becomes extremely significant going forward. While the coronavirus vaccination programme is being touted aggressively, we need to provide an aggressive economic vaccine to the budget which can help us create more and better jobs for our youth.

The current discourse around jobs in India seems to be infected with an undue fantasy about their number. There is hardly any scheme or initiative which is launched without the dignitaries emphasising on the number of jobs that will be created as a result of it. However, the buck stops there. There is no official stance that talks about the quality of these jobs in terms of remuneration, job security, social security framework and skill development opportunities.

Thus, analogous to a placebo in a Covid vaccination program, such job-related announcements remain largely ineffective to achieve an inclusive economic growth. Before exploring how to deliver on this vision, it is prudent to take a step back and assess why we need growth in the first place?

In early 1940s, a committee under the leadership of Jawaharlal Nehru was set up by the then President of the Indian National Congress, Subhash Chandra Bose. The committee was asked to look into this question, and it argued for the need to improve levels of living. Upon achieving independence, under the Prime Ministership of Nehru only, the country adopted a path of increasing the national wealth so that it can be redistributed to achieve this vision. A failure to do so has been exemplified by the narratives that have gained prominence in the subsequent years to come. From ‘Gareebi Hatao’ in 1970s to sustainability and inclusivity of growth in early 2000s, nothing seems to have stopped the rising income inequality between the well-off and the poor.

Now this pandemic has busted open the inherent fault lines in the way the economy treats humans. And guess what, we have a new mantra – resilience.

From a jobs perspective, this essentially implies that over and above inclusivity of growth and trickle down of financial gains to society, there is a need to also ensure that economic processes and people in the economy have greater resilience, from global order as well as domestic externalities.

There is a strong linkage between enhancing the well-being of the large masses of people at the bottom of economic pyramid and achieving an inclusive and resilient economy. By raising their incomes, the demand for basic and aspirational goods will increase, giving a major push to increased investments and hence, economic activity.

This is just not feasible if we fail to explore the issue around jobs and job creation from a wider perspective.

Take the textile sector for example. Primed as a sector that is catering to livelihood needs of around 4.5 crore people, there is a need to challenge this data on multiple fronts. For one, it runs the obvious risk of being inaccurate due to double counting. A cotton farmer, a petroleum factory worker involved in making raw material for synthetic textile products, logistic workers and even workers in other sectors like automobile who produce seat covers, are all proudly counted as part of their respective sector’s workforce.

Secondly, from the point of view of rolling out policies for promoting investment in this sector, not all processes involved in the manufacturing cycle produce jobs of decent quality. Thus, a Mega Integrated Textile Park, which is poised to be a crucial component of the new textile policy which is being drafted, might well create the number of jobs that the relevant minister tells during its launch. However, the nature of these jobs needs to be explored before planning for such a policy. There is a deeper sense to it.

Our research study on Good and Better Jobs, supported by Ford Foundation, shows that a typical integrated mill has most employment intensity in ancillary processes like raw material collection or finished goods packaging and loading. Similarly, for a food processing industry, most employment intensive processes are such back-end or front-end tasks, in addition to operating machines which can be more correctly described as observing machines.

For these processes, there is no scope for the workers to engage in capacity building or skill enhancement in order to climb the ladder of better remuneration, and hence better resilience. This is primarily because the factors determining the remuneration for such works is productivity as we know it, i.e. maximum output in least number of hours. Therefore, the moment a pandemic hits, or factory goes out of operation, these workers have nowhere to apply themselves, except maybe in a similar factory also under similar precarious circumstances.

In contrast to it, operations like garment manufacturing or sorting of grains or preparing processed food from innovative recipes are far more resilient because of the fact that intellectual or physical capability of humans are the deciding factors for remuneration.

The upcoming budget is the appropriate time for the Finance Minister to come clean in announcing schemes having an implication on jobs. Such announcements, initiatives and efforts should become more about laying out a roadmap delivering on the vision of Atmanirbharta and inclusive growth, than just providing numerical evidence for job creation through them. It is high time that the government demonstrates credible accountability in taking forward this agenda in their actions as well as mindsets.

The authors work for CUTS International, a global public policy research and advocacy group.


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