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5 Reasons Why Modi’s Government Failed To Create Jobs

Posted by Avinash Tavares in Society
January 23, 2018

Before coming to power, Narendra Modi promised us that he would create one crore jobs by 2019. In the last three years, his government has created schemes like ‘Mudra Yojana’ and ‘Skills India’ to help him fulfil his promise.

Last year there have been claims that the ‘Mudra Yojana’ generated 5.5 crore jobs. Many sceptics, including me, doubt this figure. The Modi government is a long way from creating the 10 million jobs a year needed to keep up with his young and rapidly expanding workforce. Creating one crore jobs may sound good at an election rally, but it is meaningless in a federal nation like India. The ‘Mudra Yojana’ is just one tool in the form of a loan scheme and that by itself it will not create jobs. The ‘Skills India Scheme’ is too focused on chasing numbers. Short term courses have been created which churn out skilled labour that is not able to meet industry needs.

Creating jobs requires a bottom-up demand-driven approach. The job of the central government is to empower states via policy making. The states, in turn, shoulder the responsibility of creating frameworks that train locals to address the needs of the local industries. Besides unemployment, this approach solves another major issue of inter-state migration, which is posing a threat to local culture and demographics.

During the 2017 Goa state elections, I was in charge of creating an employment policy for a political party. I studied the current policies at the Center and state and why they failed to achieve their goals. Through this article, I want to share my findings with the youth of this country so that they do not get mislead by tall promises. I want them to understand that issues like unemployment cannot be solved by one man who is constantly at war with states but by a leader who can keep party politics aside and brings states together to achieve a common goal. Here are five reasons why the government has failed to create jobs:

1. Lack of Vision, Roadmap And Framework To Enhance Employability

The Modi government set a target of creating one crore job without setting state-wise targets. There was no seriousness shown in real data collection. The data collected from the Ministry of Labour is through surveys. Without accurate and real-time data, this vision was unachievable from the beginning. Narendra Modi, who was too busy leading the BJP’s election campaign in various states, failed to bring them together and push them to set targets and initiate reforms.

The vision for every state must be “100% employment rate in 10 years” with intermediate goals of doubling the employment rate every three to five years. These goals must be adopted by the centre, state, district, taluka and even at the village/municipal level. To implement these goals, a framework is required. Currently, the states have not adopted a uniform framework. The ‘G20 Employment Working Group’ created a practical framework for enhancing employability in association with the ILO, and the World Bank presented a report titled “Enhancing employability, 2016” which proposed a policy to enhance workforce employability. They presented the following policy framework as follows:

  • Enhancing Post Metric Education
  • Anticipating emerging skill needs and adopting policies accordingly
  • Reinforcing the role of training and work-based learning
  • Enhancing the adaptability of workplaces
  • Promoting labour mobility

2. Dilapidated Employment Exchange

Just like Goa, the employment exchanges in most states have been reduced to issuing employment cards for government jobs. They lack a decent website where citizens can enrol and seek information about jobs and vacancies. They do not conduct any survey or record any information about employment in the state. The Employment Exchange must be upgraded with providing online services and real-time information about employment in the state. Some of the reforms needed are:

  • From SSC onwards, every student has to be enrolled in the employment exchange.
  • Exchanges must go Online by setting up Employment Exchange Portal by which citizens and employers can register.
  • The portal must provide access to list of all type of jobs available in the state along with information regarding the qualification and skills required along with institutes providing the requisite courses
  • It must be made mandatory to upload all vacancies on Employment Exchange Portal.
  • The portal must provide services that will connect employers with eligible employees.
  • All applications for government recruitment must be made online.
  • Taluka level Employment Kiosks have to be set up to assist the youth in enrolling, creating digital lockers, accessing job and course information, etc. District Level Employment Exchanges must be reorganised to administer taluka level exchanges and also to reach out to all educational institutions.
  • Unemployment subsistence schemes must be implemented with the objective of encouraging the unemployed to attend skill development courses.
  • One of the most important functions of the Employment Exchange must be to set up and administer Sector Skills Training Councils.

3. Lack Of Skills Sector Council

Skills councils are employer-led tri-partite organisations involving representatives from employers, workers and government or educational institutions. They are generally publicly funded but can receive some additional funding from private sector members.

Skills councils are independent organisations that provide a platform for the discussion of the skills-related challenges of specific sectors or regional areas, as well as the development of joint policy responses. They provide recommendations on education and labour market policy, which can be general in nature, or specific to a certain region, sector or individual education and training institution and its programmes.

One of their tasks is to monitor the labour market in the relevant sector and forecast which skills will be needed. These councils are involved in the provision of training, thus translating their sector-specific knowledge into education and training courses. At the national level, there are Skills Sector Councils promoted by National Skills Development Corporation. Each of the Councils has their own website.  However, it is not clear how often they meet and what they discuss.

National level Councils may be suitable to shape policy, but these councils are set up under a corporation which is emphasising too much on the scheme and is projected as the solution to Indias unemployment issue. This is one reason why Skills Council has failed.

Instead, the councils should have been set up under the supervision of the existing state employment exchanges. Sector Councils are required not just to create course curriculums but also to collect local-level information about the growth in the sector and the demand-supply of labour. Using this information, short and long-term training courses must be updated to ensure continuous, uninterrupted supply of skilled labour. This cannot be achieved by national level sector councils alone. The states have to implement Skills Sector Councils immediately, meet every quarter and work with universities, local colleges and training institutes to update their syllabus. This is how countries like Australia and Canada have implemented Skills Sector Councils which has, in turn, resulted in high employment rates.

4. Lack Of Effective Apprenticeship Council And Programmes

Apprenticeship is a programme of structured education and training which formally combines and alternates learning in the workplace with learning in an education or training centre. It is a dual system, i.e. a blended combination of on-the-job employer-based training and off-the-job training whose completion prepares the participant for a specific occupation and/or leads to an award or recognition by the employer and/or Apprenticeship Council. Apprenticeship programs help bridge the gap between the unemployed freshers and the industries.  The Indian apprenticeship policy is in urgent need of reforms. The information about these programs and enrollment has to be accessible on their mobile device.

5. Lack Of Reforms In Labour Laws

According to an Ease of Doing Business report by Niti Ayog in 2017, firms in labour-intensive sectors find compliance with labour-related regulations particularly onerous. This fact translates into enterprises avoiding the labour-intensive sectors. Those that do, employ migrant labour on contract basis which makes it easy for them to employ and lay-off without facing the wrath of labour unions.

Many enterprises discourage labour unions which gives them unilateral powers to decide the fate of their employees. The recent mass layoffs in the IT sector has proved how important labour unions are. The government has to make it easier for small and large businesses to comply with labour laws. Many of the states are still yet to provide online services for compliance. Services need to be time bound. Labour Courts have to dispose cases on a fast track basis. These are just a few of the long pending reforms.

Unfortunately, right-wing parties across the world, like the BJP, seldom focus on labour reforms. These parties believe in trickle down economics. They provide subsidies and incentives for businesses hoping that this will trigger economic growth which in turn will create jobs. They help keep wages low by encouraging the mass migration of unskilled labour, preferably from one state to another.

In the US, the Republican Party pushed for tax cuts for the rich to bring jobs back to the US, even though in reality, higher taxes encourage business to reinvest and expand operations. In India, the government has focused too much on financial reforms such as demonitisation, GST, bank recapitalisation and business loan waivers instead of implementing labour reforms. With less than two years remaining, it is unlikely that any major reforms will be initiated.

Looking ahead, I hope that the voters of this country elect representatives that understand the need and urgency for major policy reforms. If the status quo is maintained for another five years, we will have an unprecedented number of unemployed youth, who will have no choice but to migrate to other states and countries.