Will Modi3.0 finally wake up to unemployment crisis in new budget?

News of stampedes occuring at the doors of the few companies that are hiring in India is now commonplace as despite promises of employment generation through economic policies of the Narendra Modi government have failed utterly and unemployment is not just widespread but reaching a worrying level. The crush of applicants, often highly overqualified even for basic, manual jobs that require little or no skills, indicates how desperate the youth of India is for jobs and the demographic dividend that Modi keeps talking up has become a demographic disaster. Will the government wake up to the crisis when it presents the full-year budget on July 23?

Budgets in India have long been closely monitored as they set the tone for the government’s priorities and policies for the year ahead and this year it will be no different when Finance Minister Nirmala Sitharaman takes the floor of the Lok Sabha on July 23 to introduce the budget for the full year.

Normally, the budget presentation is closely monitored by the industry leaders, those involved in stock markets and money markets, but this year, Sitharaman’s pronouncements would also be followed by hundreds of millions of unemployed youth all over the country to see if the finance minister will recognise the crisis of rampaging joblessness and whether any corrective measures would figure in her budgetary speech.

Though Sitharaman and her boss, Prime Minister Narendra Modi, have so far turned a blind eye to the mounting unemployment across India, it was recently served two clear and high-profile incidents that displayed how desperate the situation has become and the lengths to which the youth of the country would go to land a job.

A week ago, when Air India Ground Services, a subsidiary of the Tata Group’s eponymous airline, advertised for recruitment of baggage handlers and fixed a day for walk-in interviews, it led to stampede-like situation at its main office at the Sahar International Airport in Mumbai as over 25,000 persons turned up for the barely 2,200 positions advertised.

When Air India Ground Services, a subsidiary of the Tata Group’s eponymous airline, advertised for recruitment of baggage handlers and fixed a day for walk-in interviews, it led to stampede-like situation at its main office at the Sahar International Airport in Mumbai as over 25,000 persons turned up for the barely 2,200 positions advertised.

Many, if not most, had travelled from across the country and had begun to queue up outside the recruitment office from the evening before the appointed time. Almost everyone was highly overqualified as the job requirement was basic literacy and a physically fit body, yet in the queues were post graduates, engineers and the like.

Earlier in the same week, a company at Ankleshwar in Gujarat witnessed a similar scenario when its advertisement for 10 positions drew over 1,000 persons and the overcrowding in the building where the company was located led to safety railings of the building breaking under the weight of the crush. Fortunately, no one was hurt as it was not too high above the ground.

A few months earlier, just before the general elections, advertisements for a handful of government jobs, once again for the unskilled or semi-skilled positions, attracted so many candidates that the trains for the cities where their examinations or interviews were scheduled were so overcrowded that even the passengers with reserved seats could not board the trains.

These scenarios, occurring in different parts of the country, at different times and very distinct sectors, paint an accurate picture of how serious the issue of unemployment in India is today.

Ten years ago, while campaigning for the top job in the country, Modi made outlandish promises of creating at least 20 million jobs every year to cater to the rapidly growing population in the country where at least 20 million youth enter the job market each year.

But let alone creating new jobs through a bigger participation by the private sector, Modi has wrecked even the public sector and most government departments and public sector undertakings have seen their staff strength decline sharply over the past decade, even though their size and responsibilities have increased dramatically over the past decade with the population rising by at least 200 million.

Most of the private sector has been crimping on hiring, with a high-degree of automation meaning manufacturing jobs have actually declined over the past decade. As a result, India faces unprecedented levels of unemployment, especially amongst the youth.

According to India Employment Report 2024 by International Labour Organisation (ILO), released in March, 83 pc of the unemployed in India are youth and that total unemployment across the country had reached 6.1 pc, the highest in past 45 years.

Even the few companies that are hiring have turned to outsourcing their manpower to third party vendors who in turn very rarely provide the benefits that come with a permanent job, such as healthcare and social security such as Provident Fund and Gratuity, which are mandatory for employers to provide.

The standard industry practice for the outsourced jobs is to deny even paid vacation or paid medical leave to their workers, in stark violation of not only the global norms, but even the labour laws in India. Such rampant abuse of workers can be seen in sectors like construction, providers of security guards and healthcare.

Lack of jobs has also forced tens of millions of Indians of various ages to turn to the gig economy, notably in food and goods delivery companies like Zomato and Swiggy or Blinkit and Dunzo, besides ride-sharing platforms like Uber and Ola. However, these gig economy stints come with zero cushion or protection, making the workers often risk their lives and limbs by either driving too long or too fast and often in clear violation of traffic rules.

Not only do the companies who employ these ‘partners’ as the gig workers are whimsically called, turn a blind eye to these practices but also refuse to provide any kind of insurance to their workers, while their managements enjoy valuations that go sky-high.

But the crush at the hirings clearly indicates that the gig economy or not, unemployment is now at the breaking point and if the government does not undertake large-scale corrective measures, both in terms of hiring on its own account as well as proactively encouraging employment generation through a multitude of incentives and penalties as well as legislate stronger and in some cases first measures to protect the rights of the workers, even if it relates to the gig economy ‘partners’, India is headed to convert its dividend into a certain disaster and which in turn will lead to increased social strife.