Instead Of Denying Joblessness, Govt Must Fill Its Knowledge Vacuum

All governments wrestle with the idea of two constituencies — the political constituency and the economic constituency. The government's earlier concern in the economic constituency was about pension costs and the layering of liabilities in the future. The political constituency has spoken in the past few elections, so the government has made some adjustments.

The recently introduced Unified Pension Scheme, which ensures government employees get 50% of their last drawn salary as a pension, falls in the overlap of the political constituency and the economic constituency. It could satisfy both and also those who are concerned about liabilities.

There is an assured family pension and employees can choose between the National Pension Scheme and the new one. The scheme is set to benefit 2.3 lakh central government employees. If state governments implement the scheme it could benefit as many as 9 lakh employees. However, this isn’t a holistic solution for jobs or job creation in the country.

This scheme will once again underline the advantages of a salaried government job, which is already looked at with high regard in India. It could lead to more people applying when new posts are announced or tests for government jobs take place. Historically, families which have had a government job have had a more secure future. In rural India, it is an aspiration. If you get a government job, you get a better bride, better house and better everything.

In India, there is too much dependence on government jobs because the private sector does not create enough jobs. It’s not like India has not thought about this problem. When Narendra Modi came to power 10 years ago, he spoke about India becoming the manpower solution for the world. While there was an attempt to take this idea forward at the time, we must take stock of where we are at in the present, something the government doesn’t seem to be doing.

There is a surfeit of information and a vacuum of knowledge in the government. There are global opportunities and local opportunities. There have been agreements with Japan or Israel for the movement of skilled Indian labour to those countries. At the state level, each state has investment summits, but there is no review of the actual investment being made in those states.

Ideally, there should be an evaluation of whether the investment conferences lead to investments, and whether those investments are creating jobs. The NITI Aayog is the best institution to study this and advise governments. States also need to share the best practices for attracting investments.

The way forward lies in looking at data and being prepared for geopolitical situations across the world. The government has an understanding of the skill set, and how much skill training has happened, and private companies also have databases on skilling. Align all of this, and you’ll know the number of jobs that need to be created versus what is actually being created.

As geopolitics unravels across the world and disruptions unravel, the ability of the Indian economy to support jobs will be challenged, whether it be moving to net zero in a fossil fuel economy or artificial intelligence. There will be other disruptions too. For instance, in the US, weight loss drugs such as Ozempic are set to impact everything from fast food chains to cigarette makers. Similar things could happen in India.

The government has not paid sufficient attention to how to process this information every month. Instead of going blue in the face and denying joblessness and underemployment, the government must analyse all this information and find the missing opportunities.

Already this year overall growth will not be as robust as last year, which has consequences for job creation, global growth will be lower, which has consequences for the IT sector, which is the largest employer. The government should have an interstate council that meets every month and discusses what's happening to the economy and thereby job creation.