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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

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