Raghuram Rajan flags
employment concerns amid India's growth momentum
Former
Reserve Bank of India (RBI) Governor Raghuram Rajan on Wednesday expressed
concerns regarding India's employment situation, despite the economy displaying
signs of growth.
In
an exclusive interview with The Economic Times (ET) Online, Rajan
highlighted the necessity of tackling the scarcity of private sector jobs,
noting the rising trend of individuals opting for government employment as a
significant indicator.
"The
broader question is, is this growth providing enough jobs? The answer here is a
lot more nuanced. It is providing more jobs in construction, and the government
has engaged in a tremendous amount of infrastructure construction. That has
also energised private development of houses and so on," Rajan said.
However,
he highlighted that despite government efforts, employment in sectors like
manufacturing has not seen a significant uptick.
Rajan's
remarks come at a time when unemployment remains a major issue in India, with a
survey by Lokniti-CSDS revealing that 27 per cent of voters consider it their
top concern.
Nearly
62 per cent of the surveyed respondents stated that securing employment has
become increasingly challenging over the past five years.
In a
critical examination of the Narendra Modi government's decade-long tenure,
Rajan highlighted a glaring omission in the recent whitepaper released by the
NDA-the absence of any mention of 'unemployment'.
"Search
the document! The point is, we need to pay attention to this issue, it is
serious," he said.
Rajan
underscored a disquieting reality, pointing out the overwhelming appeal that
government jobs still hold in India.
"Huge
numbers of people are applying to government jobs because private sector jobs
are not being created," Rajan said in the interview with ET.
Before
assuming office in 2014, PM Modi had famously pledged to provide 10 million
jobs to India's youth if his party was voted to power. At that time, he rightly
acknowledged that 65 per cent of India's youth were grappling with
unemployment.
According
to reports from news agency Reuters, government estimates indicated an
unemployment rate of 5.4 per cent in FY23, up from 4.9 per cent in FY14. However,
the Centre for Monitoring Indian Economy (CMIE), a privately run institution,
has reported a figure exceeding eight per cent for February 2024.
Rajan
further cautioned against relying solely on data from CMIE, noting its
volatility, and called for improved methods of tracking unemployment in
India.
The
best government source is the Periodic Labour Force Survey (PLFS) data which
comes once a year, which is too slow to make any serious decisions based on
employment numbers, Rajan said, highlighting the need to transcend the
political sparring between ruling parties and the Opposition on this crucial
issue.
www.business-standard.com
dt. 18.04.2024