Santosh Mehrotra 
This article is part of The Wire‘s ‘India Black Boxed’ series. Read it here: Introduction | Part I
The current regime started with pretty impressive promises in 2014 with respect to employment (two core jobs a year). If realised, by March 2024, 40 crore new jobs should have materialised. Have they? If not, what is the reality?
The reversal of employment growth in non-farm sector and little progress in Skill India
The reality is the following. First, open unemployment was barely 2.1% in 2012 (the last year for which data was available before the BJP came to power). It had already nearly tripled to 6.1% in 2018 (National Survey Organization’s Periodic Labour Force Survey (PLFS), conducted annually since 2017-18), the highest rate in 45 years of India’s labour force surveys.
The total number of unemployed was one crore (2012) before the BJP came to power – but it had tripled by 2018 to three crore. The youth unemployment rates went through the roof for: those with middle school (class 8) education it rose from 4.5% to 13.7%; with secondary education (class 10) from 5.9% to 14.4%; those with higher secondary (class 12) education from 10.8% to 23.8%.
Educated unemployment worsened sharply. For graduates, the unemployment rate rose from 19.2% to 35.8%; and for post graduates from 21.3% 36.2%. All this did not deter the Government of India (GOI) from announcing a New Education Policy 2020 that higher education enrolment should rise from the prevailing 27% (for the relevant age cohort of 18-23 year olds) to nearly double to 50% by 2035. How are these new higher education graduates supposed to be employed, if the current crop of graduates face rising unemployment.
Skill India has been flaunted as part of a new National Skills Policy in 2015. It laid out the goal of skilling 40 crore workers by 2022. The outcome? The workforce share that was formally vocationally educated/trained in 2012 was 2.3%. In 2022-23 that share had barely moved to 2.4%. Meanwhile, in administrative data reported by GOI for the Pradhan Mantri Kaushal Vikas Yojana (PMKVY): in its three versions, the total trained were 1.8 million, 4.5 million, and 0.4 million in PMKVY 1, 2, and 3. In each PMKVY, from 2018-2023, cumulatively 14%, 43% and 7% were placed in jobs. That tells us what the quantitative reach plus qualitative outcome is of these schemes. This is a short term training scheme (maximum 3-4 months), and a significant share of these “trained and certified” numbers are for Recognition of Prior Learning, lasting mostly two days at best.
Unemployment rates for those with formal vocational education had been 18.5% in 2012; it had shot up to 33% in 2018. For those with technical degrees unemployment rose from 18.8% to 37.3% in six years to 2018.
Yet, BJP can turn around and say that the share of youth voting for BJP in 2019 Lok Sabha elections was larger than in 2014 (CSDS Surveys). How do we explain this phenomenon? Two probable explanations apply: one, that the worsening of unemployment was too recent to not be internalised by youth by 2019; two, the GOI adroitly did not allow the 2017-28 PLFS data of unemployment to be released before 2019 elections results were out, but released the data a week after it had won national elections. (Of course, Pulwama-Balakot nationalism likely trumped any discomfort unemployment was causing.)
This decade current jobs crisis is deepening for three large groups…
There are three groups who need non-farm jobs, whose numbers are constantly growing – so we have both a high stock plus rising flow problem with unemployment. First, the stock of unemployed in 2023 October is 42 million (at 10% of the workforce, according CMIE), a stock to which every month a flow of a few hundred thousand get added. Second, there is a regular flow of young people (turning 15 or over) who are looking for work, who number at least eight million (or 80 lakhs), and their numbers grow each year, as the share of the working age population rises at an accelerating pace each year (at least till 2030, after which it will still rise but at a decelerating pace). An important and growing share of these young are girls, whose educational levels have grown sharply in the last two decades, as demand for education rose. India achieved secondary enrolment of 85% for 15-16 year olds in 2015 (rising from 58% in 2010), with gender parity.
A third group in need of jobs is a stock of under-employed workers in agriculture, constituting 46% of the WF in 2023, who contribute only 15% of India’s GDP. In 1970 the average farm plot size was 2.25 hectares; which fell, due to rising population to 1.25 ha in 2010, and continues to fall. These plot sizes are too small to achieve economies of scale, and adopt new technical inputs, so productivity and yields on these farms remain low, and hence drives down agri-incomes, forcing migration for non-farm livelihood.
Tragically, government policies since 2016 have not only reduced the number of new non-farm job creation till Covid. More importantly, starting April 2020, after a sudden, national lockdown of very high stringency (by international metrics, as determined by Oxford University’s Blavatnik School of Governance), millions were forced to migrate back to migrant ‘origin’ states from ‘destination’ states: a dramatic six crore (60 million) workers were added to agriculture between April 2020 and June 2023.
…compounded by reversal of structural change: Agriculture rising and manufacturing falling
Structural change in India should consist of not only the share of industry in GDP rising, but also the share of workers in agriculture falling. In India we have seen the opposite since 2020: the share of agriculture has risen, and even worse, the absolute number of farm workers, which began falling for the first time since independence from 2004 (on account of rapid growth and rapid non-farm jobs growth), and which continued till 2019, has been reversed in a matter of