If there is one crucial thing that remains a political and economic headache for the ruling BJP, it is the unemployment crisis and its booming trend. As the Modi administration is all set to table its full budget ahead of the 2024 Lok Sabha polls, all eyes are closely watching how it is going to tackle this crisis and uplift the younger generation who are caught up in the wave of job uncertainty.
By the time you read this content, the top companies could either be sending their employees home or would announce a massive layoff. According to the Centre for Monitoring Indian Economy (CMIE), the unemployment rate in India rose to 8.30 per cent in December 2022, the highest in sixteen months. Though the Modi government is carrying out the 'Rozgar Mela' drive to give jobs to ten lakh people, the concerns remain high over the job surety for the graduates and for the workers in the unorganized sectors, who constitute a vital share of the nation's workforce.
As India is displaying a beleaguering track record when it comes to employment and as the crisis of unemployability is rampant across the country where over half of the population is below 30, how the government should mitigate the distress, and how this budget should address this unemployment crisis? With these key questions, we spoke with KE Raghunathan, the founder-chairman of the Association of Indian Entrepreneurs, who is based in Chennai.
Raghunathan says, "We have to separate the unemployment issue into two parts - one is organized employment and the other is unorganized employment. Organized employment would come under social security schemes like PF and ESI. Though they work in the government or private sector, they would be getting a guaranteed income. Today, if you see the scale of formal employees, it's nearly about 6.5 crore people. This CMIE data shows the unemployment figure in this bracket of formal employees."
"As per the data, each year, about 80 lakh fresh graduates search for jobs and about 42 lakh people get retired. We must concentrate on the informal sector because the employees in the organized sector are attached to a guaranteed income and social security schemes. But, when you take the informal (unorganized) sector, about 22 crore people are working under this bracket across the country, which is four times greater than the employees in the organized sector. The unorganized sector includes daily wage earners, people who are working under the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), and migrant workers", he adds.
Raghunathan further says, "The unorganized workers must work daily to earn. During the 24 months of covid situation, these workers had left with no job for nearly 12 months due to lockdown. With no savings in hand, they are pushed to seek gold loans to win bread for their families. Today, these workers have no options because industries have no window to hire them. If these workers need to earn and want to make money, the entrepreneurs must be supported. All these informal workers are attached largely to the MSMEs (which is one of the country's largest employers)."
By citing that there are 12 crore MSMEs as per new reclassification done in 2021, Raghunathan says, "If we look back at what we have done for them in the past three years, we have done nothing and have a long way to go. We introduced Emergency Credit Line Guarantee Scheme (ECLGS) to provide loans to MSMEs and Rs 5 lakh crore was allotted to this scheme. As per the recent government data, Rs 2.5 lakh crore has been released as loans as on date and it has only reached about 1.3 crore MSMEs. What's for the rest of the 10 crore MSMEs and what's the option for the people who can't be beneficiaries of this scheme?".
"How are we going to save them? In view of this, the government should focus on developing MSMEs. We can break the support to MSMEs into three parts, one is related to Money - the loan or funding that's not accessible to them. This government must streamline this disruption. The second is the issue of losing the profit to pay the high interest. If the MSMEs are unable to pay the interest, the government has to subsidize them. The government should give loans for MSMEs at a concessional 5% of interest. I am not asking the government to do it permanently, let it give loans at low interest rates for the upcoming year", he opined.
"In this upcoming year, the government has to concentrate mainly on two important sectors - MSMEs and addressing Unemployment. If the MSMEs are doing well, they can take care of the other problems themselves. Through this budget, the government should mitigate the difficulties faced by the MSMEs in receiving funds from their corporate or Govt supplies, or services rendered. The other important need is the inflation of raw materials is soaring and the government should form a monitoring committee or public distribution system for the raw materials to regulate the soaring prices. The government should ensure that these MSMEs get raw materials at fixed price for the next one year", he added.
Highlighting that such trend would ensure that the MSMEs make a profitable revenue, which will drive them to repay the loans, Raghunathan states, "With that additional profits in hand, the MSMEs will also increase production and increase employment. The budget must give them more opportunities. The third major problem faced by the MSMEs is the Manpower. Today, we can see a huge gap between unemployment and unemployability. The young people who come out of college don't have a proper understanding or job skills required for their jobs. We are sadly diminishing the standards of our education, where even an engineer can't be hired as a worker."
He further says, "The unemployability is high. We need to work on enhancing the area of skill development. It's important that young people should be employed as per their education and paid as per their contribution. We are producing the opposite trend as we can see the graduates turning to do delivery works at our doorsteps. If 42,000 people are applying for the post of 25 peon jobs, over 25,000 of them are graduates. We are painfully witnessing over three-hundred M.Tech graduates applying for scavenger jobs in the Railways. What kind of education we are offering them? We neither give them proper employment services nor we ensure a proper pay scale."
"All these delivery boys and GIG workers, ten years later, when they become 35-year-old or become unhealthy of doing these jobs, they will be thrown away. Because, for these delivery workers, all they know is how to operate Google maps and how to check and deliver or pick up the orders. Machines are created to help human but unfortunately, now humans are helping machines. We are seeing that the machines have started to do skill-based jobs. We are pushing people to listen to the machines. Is this acceptable for the country like India where over 60% of people are earning a low income? This government must think about it. The young workers these days are spending more on health as they face tensions, stress, and various illness", he adds.
Raghunathan contends, "We shouldn't always keep dreaming about future and growth and GDP. This budget should frame the plans and measures to achieve the dream. If they (the Modi administration) wish to stay in power for five more years, then this budget should make common man happy. The seed they sow in this budget should help build confidence in the people's lives. This is what we are expecting." Union Finance Minister Nirmala Sitharaman would table her fifth budget in the Parliament on Wednesday - February 1 and as several issues are at stake, it is certain that this budget would play a vital role in the voters' verdict in the 2024 Lok Sabha polls.
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