DNA Edit: Joblessness needs to be tackled on a war-footing

The signs on the ground are difficult to miss. Growing joblessness has brought about a shift in public mood as both the organised and informal sectors witness a decline in economic activities.

The Opposition has pounced on the opportunity to discredit the Narendra Modi government over demonetization and GST — the two factors deemed responsible for the economic slowdown, resulting in massive retrenchment in sectors like manufacturing and textile.

These are indeed trying times for the government, which is determined to put the economy on the path of recovery. The Skill India programme has undergone massive changes in the recent past to become decentralised and more demand-oriented to meet its short-term objectives of employment.

To counter a three-year low of 5.7 per cent growth in the quarter that ended in June, the Finance Ministry is planning to pump in Rs 50,000 crore into the economy to revitalise bank recapitalisations, rural jobs programme and rural housing.

The launch of a massive Rs 16,000 crore electrification plan that will offer free connections to four crore poor households in villages and cities is a big leap towards minimising social and economic inequities, which is the primary aim of all government initiatives, including the crackdown on black money and benami properties, bringing in Aadhaar and tightening the noose around shell companies. The FY19 numbers will surely reflect the dividends of the painful transition, which critics have decried as disruptive activities.

However, since the wait towards fruition is marked with uncertainties, the problem at hand demands some radical thinking. Consider this: In 2015 and 2016, average employment generation plummeted to less than 2 lakh jobs a year.

This is less than one-fourth of the annual employment generated before 2011. The lone silver lining was services sector — primarily health and education — that suffered the least from the demonetization purge. However, there are a few bumps in the services sector as well. Given the dynamic nature of IT services and the recent global push towards Artificial Intelligence, India’s IT sector is bleeding due to its inability to cope with the latest technological shift.

The lay-offs are a measure of that desperation in top Indian firms. Sadly, the informal sector, which employs, according to a 2009 estimate, nearly 90 per cent of the country’s labour force, has been hit the hardest due to sweeping reforms.

Again, for India, what has aggravated the crisis is a near-moribund global economy whose growth rate has slowed down to 2.5 per cent from 3.2 per cent in 2016. The government needs to act and act fast, lest the job losses start eating into Modi government’s hard-earned political capital.