PM Narendra Modi turned 70 last week! Surely a day to celebrate a moderate social democrat and populist strongman running the most centralized government India has seen in decades. Netizens saw him as a sensible economic reformer and bestowed an overwhelming mandate across the nation in the 2014 general election. It shifted the Overton window significantly to which opposition has refused to budge and ensured the pathetic condition of our democracy. It’s apt to call our democracy as opposition-less since the parties couldn’t reflect on voter’s aspiration twice. Voters never change their perceived worldview to make the party win, the party should do advocacy on their own credibility.
Opposition-less democracy let the reigning government either to spin their own narrative or let the regular trend go on. In such a crucial set-up, youth as floating voters come to the prime front to decide. Recently students irrespective of political ideology did online protest and even hunger strike demanding postponement of deciding NEET/JEE exams. Again a student outfit observed PM’s birthday as ‘national unemployment day’ this year online and off-line by putting up tea and pakoda stalls outside Universities as a show of protest against the current unemployment rate in the country.
Before opining whether the youth issues are truth or myth, such a rumbling voice of these floating voters may indicate towards another political Overton shift, but it actually won’t. The so-called opposition has also accepted the fate and chosen their position by mainstreaming a racist moron and womanizer Periyar recently. The series of occurrences was very amusing. The political party that kept flaunting its alien idea of secularism tried to adopt the soft version of Hindutwa in the beginning as Savarkar once said:
“Hindus in Congress will have to wear their principles on their sleeves, they will have to wear janeu not only on their body but on their coats as well.”
Later all these strategies went in vain and there was no other way to let Congress stay in the political map than choosing a completely anti-Hindu ideology. And then there comes Dravidian Ideological stand or Periyar-ism. Hence, Congress is now deemed to be weeded out from national politics and their fabricated “development” propaganda has been successfully busted by NDA’s “civilizational vigilance and development” agenda.
Now comes the nexus between far-left propaganda and Unemployment.
Myth 1/ Unemployment is “45” year high.
God knows who came up with this number “45”! Well, the vile approximation came from the Periodic Labour Force Survey (PLFS) conducted by the National Sample Survey Office (NSSO). I asked myself the validity of leaked data and its comparison with the data obtained in the previous census while the survey methodology has been changed for the first time. Previously adopted EUS (Employment Unemployment Survey) methodology was based on expenditure (for urban) or livelihood (for rural) whereas PLFS was done on basis of educational qualification. For a large population like India, 90 percent of the entire workforce is informal. Higher is the educational qualification, a person is more likely to look only for white-collar jobs, hence more is the unemployment in that sample. Even in the 2011 census, it was observed that academically qualified strata are supposed to have more unemployment.
Still people indulged in the “apple to orange” comparison must realize the overall unemployment rate in 2011 was 9.6% with each educational level not being less than 7%, then how can one come up with “unemployment is 45 years high” propaganda?
Yet “6.1%” is a disturbing, but not as alarming as the far-left wants to show the world. India needs to focus on both Job Creation and Employability. A report by multinational unemployability assessment company Aspiring Minds reads, 80 percent of engineers India produces is unemployable. Only 3% have technical skill for software related jobs and entrepreneurship and 1.7% have skill for new-age jobs. In 2016, ASSOCHAM reported, only 7% graduates from B-school were employable. Newly introduced NEP-2020 most preferably will do de-Mecaulayism of the Indian Education System and will add flexibility, learner as well as career-centric approach and curb indifference towards blue-collar jobs.
Myth 2/ Privatisation is anti-labour policy
After the liberalization of 1991, UPA did encourage partial disinvestment which was in fact a soft, harmless form of “privatization” securing economic growth. The first NDA government embraced liberalization by privatizing some PSUs, but India being a State with a fundamentally socialist DNA condemned it hugely and caused BJP’s defeat in 2004. This time they did a very strategic move. In the first term, they hardly did any transaction on disinvestments while corporates, foreign investors, policymakers were quite sure of NDA’s usual agenda. The second term was pretty much expected when Government has identified 18 “strategic” sectors where it’ll keep a limited presence with a maximum of 4 public sector units and disinvest in all other non-strategic sectors.
Back in the twentieth century, there was a stigma around the term “Globalization”. There was a multitude of hard-core protestors who had a deep-seated antipathy to Globalization run campaigns against it across the world. It was supposed national capital would be turned into forms of intellectual capital. Indian writer Arundhati Roy denounced the idea of Globalization citing it as a form of imperialism. Although there was widespread reluctance in India, the common census was in favor of globalization and by the 1990s, free trade came to play along with the economic liberalization plan by Dr. Manmohan Singh. It let greater access to quality goods and services, the exchange of skilled human resources and led to an increase in the volume of trade, a drastic growth in economic growth and consequently in per capita gross domestic product.
Another instance. There was a spike in automation anxiety in the early 1930s when the industrial revolution started. People feared machines would start taking over jobs and their right to work will be curbed. But as a result of automation, new jobs were created as a product of higher productivity. Newer industries were established for tech supplies and other indirect means. Hence, within the economy, the quantity of jobs remained unaffected. Standard of living enhanced, increased purchase capability of the nation by creating new “middle class” which is eager to quality goods and services.
Similar case is with today. With the advent of disinvestment and AI-induced automaton, conventional wisdom grips fear that new owners of privatized that’ll lead to unemployment and wage cuts. Yet they necessarily forget when State-ownership is shifted to private ownership, they focus on labor productivity, hence, a reduction in unemployment. But Profit-oriented private players look for advanced technology and markets that require further “skilled” employment with an increase in output and wage. These critiques need an extended and careful response from the State.
Popular conception suggests, after privatization, the only role left for the State is only to provide necessary security and legal condition for private owners to undertake its function. Contradictory to this notion, labor restructuring is the most sensitive aspect of Privatization to be dealt with by the Government. The fundamentally center-left DNA of post-independence India bids the Government to deal with the more sensitive way possible. The threat of unemployment, loss of benefits due to Privatization are real-world issues. In India, organized labor opposition is the active political base and their voice has been resisted the slightest possibility of privatization over many decades. After Privatization, the Government is assigned the major responsibility to regulate the private players, assure pure public goods and services, strategic consideration of market failure, cost of production, equity and welfare. Post-privatization Mexico established a labor retraining program PROBECAT to demand-driven program for displaced and unemployed labor. Similarly, Egypt set up Social funds for development for immediate post-privatization consequences. Assuming whether State will end with de jure monopoly and a vicious cycle where jobs creation is constrained, wages are minimized or potentially weakens the purchasing power of individuals at the bottom of the economic pyramid, hence consumer demand is weakened, high taxation is done or will predominantly invest in skill development and post-privatization welfare programs ensuring positive economic growth is mere slippery slope argument now.
Myth 3/ Government has no concern for disemployed or displaced workforce
During the transition, providing continuity of social security and employment to ease restructuring and to ensure labor mobility is State’s utmost responsibility. Companies with minimum overstaffing should be left for undertaking players. But Government ought to invest significant time and money in large-scale PSUs to enhance the likelihood that a social safety net for employees will be provided and their concerns will be treated well, voluntary departure is encouraged in the primary phase with generous payment. In long run, such programs develop a sense of assurance in State and minimize labor resistance to Privatization, which turns Privatization more politically and socially acceptable.
The State commenced a Voluntary Retirement Scheme to enable PSEs to rationalize their surplus labor in 1998. The Vajpayee-led government started a scheme targeted to counsel, retrain and deploy the VR optees with moderate fund allocation to the project. A surplus employee can seek readjustment after his redeployment as per the provisions. Financially sound enterprises were encouraged to adopt the VRS scheme for their surplus resources in view of a development-oriented welfare state with effective public services. The recently introduced BSNL Voluntary Retirement Scheme 2019 allows employees aged 50 or above to retire with the highest payout. Over 92,000 employees of BSNL and MNTL opted for this generous scheme which closed on 3rd December 2019 and the State-run telecom enterprises have released over 10,000 crores for VRS optees. In 2017, the UP Government screened around four hundred PWD engineers and forcibly retired 250 of them with VRS under its zero-tolerance policy towards corruption. Air India Trade Union has approached the State for a voluntary retirement scheme package. SBI accordingly came out with a voluntary retirement scheme with the facilitation of gratuity, provident fund, continuity of loan schemes under the Bank’s policy and leave encashment. Even under the Atal Insured Person Welfare Scheme of ESIC, subscribers of the private sector are subjected to get benefits from State and it has recently announced an extension of the term for the workers who lost their jobs before 31st December.
Significant labor market reforms are now a reality and India is branded in the tag of “Transition Economy” thanks to new State Policies. Code on Wages, 2019 suggests statutory backing for the minimum wage of employees of all establishment came into force in August 2019 while previously it was used to apply only to the workers under a particular ceiling. 29 central acts dealing with the workforce are simplified into four codes for ensuring social cover for employees under one umbrella and ease of doing business for the private players. New agriculture reforms has freed the farmers from compulsion of selling producted in the assigned Mandi. The Formalization of the informal economy, i.e; unincorporated small enterprises, NGOs etc. leads the labor towards a reliable social security net.
I’m not a blind pro-government person, but not a blind anti-government either. More or less I identify myself with the Libertarian Socialism ideology. There’s a weird paradox. Low unemployment rates can mean substantial poverty while high unemployment rates can be observed in countries with sound economic growth. In the initial stage of privatization, there will be severe job loss. Yes, after automaton, the standard of living has enhanced, but of specific classes. It’s where inequality of wealth comes to the play. Most of the production growth is being accumulated by the small percentage who already belongs to the high-income category. Thus, even if there will be less unemployment, social mobility will continue to be aggravated. We exist in a constantly booming world of AI-powered automation. Many say, “We won’t run out of jobs, because there are professions which aren’t automatable”. The missing word is “yet” and elites are imagining what “a world without work” will look like.
More and more we’ll “progress”, fewer hands to work will be the necessity, more and more will be the wealth disparity. Instead of calling anarchy in the society with the invalid, utopian viewpoint: “everyone should be equal”, how the State will effectively address the conditions where the relatively poorer are being mended to eke out a living in the deplorable environment should be the utmost priority for us.
“The opposite of poverty isn’t wealth, the opposite of poverty is justice; that the character of our nation isn’t reflected in how we treat the rich and the privileged, but how we treat the poor, the disfavoured.”