The key to job creation is to increase labour participation - draw more people into the labour force and to provide them formal jobs in the organised sectors. Self-employment is not job creation - they are no better than a jumla, says Mahesh Vyas.
Illustration: Uttam Ghosh/Rediff.com
Prime Minister Narendra Modi has been often criticised for not exactly fulfiling his promise of 10 million jobs during his campaign for the Lok Sabha elections in 2014.
After the Bharatiya Janata Party won those elections with an astounding majority, BJP president Amit Shah brazenly called those promises a “chunavi jumla”, or gimmicks to win elections.
As a challenger to the Manmohan Singh government, Modi was willing to risk making promises that were not to keep. He did not have much to lose.
In 2013-14, when Narendra Modi was campaigning hard he was unwilling to leave any stone unturned to find his way to winning the Lok Sabha elections.
Job promises were small fry. Gujarat does not have much of an unemployment problem and so the gravity of the problem, and therefore the promise, was probably not even entirely appreciated.
Lack of jobs was apparently a less serious problem then than it is today. Those were pre-demonetisation days.
Today, stories of unemployment are abound in the press and Ravish Kumar at NDTV runs a passionate programme dedicated to the problem.
Today, unemployment cannot be wished away.
But, it seems that the BJP continues to believe that chunavi jumlas are an acceptable means to winning elections.
Given the success of the 2014 Lok Sabha elections they may have at least one reason to believe that jumlas work.
But, it remains to be seen whether repeated use of jumlas does work.
The BJP has promised 5 million jobs over five years in its Rajasthan state elections manifesto.
These would be created through self-employment and in the private sector. Those caveats are important.
It is unclear what new steps the state would take or how the ones listed in the manifesto could spur the private sector generate this employment.
Lets place the promised 5 million jobs in some perspective. Rajasthan has a labour force of about 21.2 million. Of this, 19.6 million are employed. The unemployed are 1.6 million.
Besides, another million are also willing to work if a job comes their way.
If a new BJP government in the state provides a million jobs a year, by the third year it will run out of people to offer the jobs to.
Another important data-nugget here is that in the next 5 years, about two million employed persons will cross the age of 60 years.
So, on a net basis, the five million jobs does not add up to much in terms of additional productive human capital.
Providing five million jobs over five years is enough to absorb the current unemployed in the state but it is not enough to spur higher growth and prosperity in the state.
The key is to increase labour participation - draw more people into the labour force and to provide them formal jobs in the organised sectors. Else, the promise of five million jobs is not a promise, it is a chunavi jumla.
Self-employment is not job creation. No government can take credit for people self-employing themselves.
The Congress has listed many steps it would take to promote employment but, it has not made any promises in Rajasthan to provide a certain number of jobs.
It promises to give an unemployment allowance of Rs 3,500 per month to the unemployed. But, this is competitive electoral politics.
The BJP has promised Rs 5,000 per month to the unemployed. Both have important caveats.
The Congress, possibly sensing victory in Rajasthan, has been a little more circumspect in its promises.
Conversely, the BJP, in anticipation of a possible loss has been somewhat audacious with its promises that it may have assumed it may not have to keep.
In Madhya Pradesh, both, the Congress and the BJP were careful in making any promises on jobs. Apparently, both strongly believed that they could form the next government.
The BJP's manifesto in Madhya Pradesh has poetic slogans that promise jobs for all and it also promises to train 5 million youngsters to make them ready for jobs.
But, it seems to shy away from directly promising jobs. While the BJP comes close to promising jobs (the media has reported that it has promised 5 million jobs), the Congress manifesto does not promise jobs at all.
None promises to attract investments to spur growth through employment.
Perhaps, it could be too much to expect political parties to discuss the need to attract good quality investments for good jobs in state elections.
But, it was not a too distant past when state governments aggressively sought private investments and sought employment growth through these.
Many of those initiatives have run foul with locals. This created a disconnect between job-creation and large private investments. In the process, jobs are reduced to self-employment, which are no better than a jumla.
Mahesh Vyas is managing director and CEO, Centre for Monitoring Indian Economy