PROBLEM STREAM

India has low labour force participation rate (LFPR, 40.38%) and high unemployment rate (7.31%, for the age group 20 – 24 and 25 – 29 at 41.31% and 12.84% respectively).[1] The problem is well recognised by policy cognoscenti[2][3][4], political class[5][6] and general public[7][8]. Ruling dispensation[9][10] and administrative class[11], however, has refused to acknowledge the problem. This is a hardy perennial issue that would get worser the longer it is ignored and can lead to violent social unrest, increased poverty levels and affect overall economic growth and welfare. There is broad consensus in the policy community over the problem although differences exist regarding the scale of the issue.

SOLUTION STREAM

Most of the solutions proposed converge on movement of people from lower productivity occupations into higher productivity occupations[12]. Proposed means of achieving this include, increasing share of manufacturing in GDP, promoting labour-intensive industries etc. All of these envisage increased government spending, though there are difference in specifics of the investment proposals.

Proposed out of box solutions include 1) increasing jobs within the tertiary sector reducing dependence on manufacturing, 2) increased focus on entrepreneurship – public job creation, 3) providing unemployment benefits. While the first two are relevant and can be part of the policy response, third solution focuses on addressing the symptoms on short term only.

POLITICAL STREAM

National mood on unemployment is muted. Though public recognises the policy issue, there is no pressure on the government to address it as evidenced from the recent election results[13][14]. The government is old with elections 2 years away. Government has highly positive standing among public and opinion makers. Hence there is no pressure on the government to bring in any major changes or address the issue immediately. While the relationship between major political parties is that of conflict, the ruling party enjoys absolute majority and this will not have any impact on the government decision making.

POLICY WINDOW

The policy window is currently closed.  Paraphrasing Kingdon’s schema, the problem is not currently recognised and political climate is not ripe for change. Hence this is not the right time to get the problem into the policy agenda and push for solution. Policy window can be opened either by a compelling problem or a major happening in the political stream.

Problem Stream:

Currently the issue is an existing condition and has not matured into a problem (where policy makers strongly believe something should be done and feel confident that something could be done).

Some means to draw attention to the problem include

Indictors

The current government has started relying on new indicators (like EPFO subscriptions) to substantiate their claim on increasing job creation and employment. The focus needs to be driven back into reliable and relevant statistical data and indicators including PLFS etc. For example, as per World Bank Data, LFPR has decreased from 53.53% in 2010 to 44.93% in 2020. [15]

Focusing event

A major crisis situation will force the government to act immediately to solve the issue. Unemployment will not create a national crisis, however, certain events, if happened, could garner government attention. Sporadic reports of violent incidents related to unemployment are reported from across the country. Any major incident that gathers public attention can also force the government to act. While these are unpredictable windows, policy community must be ready to make use of the same.

Political Stream:

In the political stream, the government enjoys comfortable majority and highly popular mandate. Hence it will be difficult to force the government to undertake any policy measures. Further, the government might feel accepting such measured could be considered acceptance of failure.

Possible Policy Windows:

Existing Government –

Problem Stream: Recognition of the problem through measures as discussed above

Political Stream: Coupling of policy intervention with an existing initiative like Make in India

Change in Government –

Problem Stream: Recognition of the problem through measures as discussed above and political campaigns that highlight the issue

Political Stream: New government can take up this issue with strong political will

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[1] “Unemployment in India A Statistical Profile September-December 2021,” Centre for Monitoring Indian Economy, accessed March 31, 2022, https://unemploymentinindia.cmie.com/kommon/bin/sr.php?kall=wstatmore.

[2] Maya John, “The Era of an Unemployed India,” The Hindu, March 28, 2022, sec. Lead, https://www.thehindu.com/opinion/lead/the-era-of-an-unemployed-india/article65265303.ece.

[3] Rahul Pandey, “Unemployment at 45-Year High: India Living a Jobs Nightmare,” National Herald, January 30, 2020, https://www.nationalheraldindia.com/opinion/unemployment-at-45-year-high-india-living-a-jobs-nightmare.

[4] Govindraj Ethiraj, “India’s Job Crisis ‘Biggest Challenge, Biggest Opportunity’: Naushad Forbes,” Business Standard India, March 25, 2022, https://www.business-standard.com/article/economy-policy/india-s-job-crisis-biggest-challenge-biggest-opportunity-naushad-forbes-122032500167_1.html.

[5] “Rahul Gandhi Slams Centre over Increasing Unemployment | India News – Times of India,” accessed March 31, 2022, https://timesofindia.indiatimes.com/india/rahul-gandhi-slams-centre-over-increasing-unemployment/articleshow/89222361.cms.

[6] Press Trust of India, “SP Only Party to Raise Issue of Unemployment in Polls: Mulayam Singh Yadav,” Business Standard India, March 4, 2022, https://www.business-standard.com/article/elections/sp-only-party-to-raise-issue-of-unemployment-in-polls-mulayam-singh-yadav-122030400768_1.html.

[7] “Number Theory | Protests over Railway Jobs Are a Grim Reminder of the State of India’s Job Market,” Hindustan Times, January 28, 2022, https://www.hindustantimes.com/india-news/protests-over-railway-jobs-are-a-grim-reminder-of-the-state-of-india-s-job-market-101643308438421.html.

[8] “UP: Youth Organisations Protest Against Unemployment, Demand CM Fill Up Vacant Posts,” The Wire, accessed March 31, 2022, https://thewire.in/rights/uttar-pradesh-unemployment-youth-students-protest-adityanath-vacant-jobs.

[9] “There Is No Unemployment in the Country, Only the Congress Prince Is Unemployed: Tejasvi Surya in Lok Sabha,” The Indian Express (blog), February 10, 2022, https://indianexpress.com/article/india/no-unemployment-in-country-only-the-congress-prince-unemployed-tejasvi-surya-7764969/.

[10] “Unemployment down, Back to Pre-Covid Level: Sitharaman Counters Opposition Criticism,” The Indian Express (blog), February 11, 2022, https://indianexpress.com/article/india/unemployment-down-back-pre-covid-level-sitharaman-7766919/.

[11] “Economic Survey,” accessed March 31, 2022, https://www.indiabudget.gov.in/economicsurvey/.

[12] Ethiraj, “India’s Job Crisis ‘Biggest Challenge, Biggest Opportunity.’”

[13] Malini Goyal et al., “Will Jobs Actually Be Top of Mind When India Casts Its Vote in This Lok Sabha Elections?,” The Economic Times, March 31, 2019, https://economictimes.indiatimes.com/news/elections/lok-sabha/india/will-jobs-actually-be-top-of-mind-when-india-casts-its-vote-this-summer/articleshow/68648425.cms?from=mdr.

[14] Swaminathan A. Aiyar, “Why Did Rising Unemployment Not Hurt Prime Minister Narendra Modi?,” The Economic Times, June 5, 2019, https://economictimes.indiatimes.com/news/politics-and-nation/why-did-rising-unemployment-not-hurt-prime-minister-narendra-modi/articleshow/69655197.cms?from=mdr.

[15] “Labor Force Participation Rate, Total (% of Total Population Ages 15+) (Modeled ILO Estimate) – India | Data,” accessed March 31, 2022, https://data.worldbank.org/indicator/SL.TLF.CACT.ZS?end=2020&locations=IN&start=2010.