MUMBAI: Tackling India’s chronic joblessness will be the biggest challenge for the government over the next five years, even as the country remains the world’s fastest-growing major economy, according to policy experts polled by Reuters.
Asia’s third-largest economy grew more than 8 per cent last fiscal year, driven by government capital expenditure that so far has failed to spark sufficient business spending to create enough work, particularly for young people in a country of 1.4 billion.
Prime Minister Narendra Modi’s Bharatiya Janata Party lost the parliamentary majority it has held for the past decade in national elections that ended in early June over widening inequality, relentless inflation pressure – particularly on food – and a lack of well-paying jobs.
An overwhelming 91 per cent majority of development economists and policy experts, 49 of 54, said unemployment would be the biggest economic challenge for the government’s term in a survey taken May 15-June 18.
“In India, we have a very peculiar problem – supposedly very high aggregate growth rates and no increase in employment. Modi came to power offering aspirational youth jobs and a better life, but it’s gotten significantly worse since then,” said Jayati Ghosh, professor at the University of Massachusetts Amherst.
“You have to have a job-specific strategy … You have to dramatically increase public employment in basic social services, health, education, nutrition, sanitation.”
The BJP has acknowledged employment was a factor in the election and said “whatever best can be done is being done”.
However, most economists questioned the government’s ability to provide jobs or accurately measure its success or failure. Others underscored the role business needs to play in bringing about material change in employment.
“Government alone cannot possibly create the jobs required to absorb the millions entering into the workforce every year. That requires the private sector to step up with high, sustained investment,” said Rajeswari Sengupta, associate professor of economics from the Indira Gandhi Institute of Development Research in Mumbai.
