The Opposition Congress on Sunday said demonetisation, a hastily rushed through Goods and Services Tax (GST), and rising imports from China were the main reasons for the decimation of micro, small, and medium enterprises (MSMEs) in the country that provided employment to a huge number of people.
The party was reacting to a report by Citigroup, a multinational banking group headquartered in the U.S., that said India’s unemployment challenge is a multi-faceted one and even 7% GDP growth might not be able to fulfil the jobs required in the country over the next decade.
Congress general secretary Jairam Ramesh said he had been sounding the alarm on the unemployment crisis for the past five years. “The crisis has been accentuated with the decimation of job-creating MSMEs through the ‘Tughlakian demonetisation’, a hastily rushed through GST, and rising imports from China,” Mr. Ramesh said. “With his economic policies that favour only large conglomerates, the non-biological PM has created India’s highest unemployment rate in 45 years,” he added.
Citi has suggested efforts could be made to fill one million Central government job vacancies to address the situation. It also recommended operationalisation of the four labour codes, and said labour reform could be a significant step towards ease of doing business.
Depending on employment data from the Centre’s Periodic Labour Forced Surveys and the Centre for Monitoring Indian Economy, the report said a “holistic employment generation strategy” will be a combination of deploying scarce fiscal resources to support labour-intensive manufacturing for export purposes, bridging the skill gaps through more formal vocational training, improving availability of credit through credit guarantees to promote self-employment, a large-scale social housing project to boost construction jobs and operationalising the labour reforms to infuse formalisation and flexibility in labour markets.
The report said while the official unemployment rate is just 3.2%, details reflect serious issues around the quality of jobs and possible under-employment. It said agriculture accounts for 46% of all employment but its contribution to the GDP is less than 20%. “Both manufacturing and services sectors absorb lesser share of labour than their share in GDP. Share of formal sector in non-agriculture jobs is still only 25%,” the report said. It added that only 21% of the labour force has a “salaried” job. “Share of employment in rural areas has remained at 67% between 2018 and 2023, indicating that the rural to urban migration process has stalled,” it said.
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Aisha Patel is a dedicated Indian correspondent with a deep understanding of the nation’s diverse affairs. With a background in Indian culture, politics, and current events, she provides in-depth analysis and timely reporting on domestic issues within India.
