In
most countries, unemployment is a clean-cut, easily understandable —
and identifiable — problem. In India, it’s not that simple. The
complexity of our economy, the barbed-wire fence of restrictions that
surround our “organised” sector, the tendency towards seasonal work, and
the networks of caste, clan and kinship that still govern employment in
many parts make answering the simple question “How many of India’s
workers are unemployed?” very difficult indeed. The labour ministry has
just conducted a survey in 300 Indian districts of people aged between
15 and 59, and estimated that 9.4 per cent of them are unemployed. This
diverges widely from the estimate of the National Sample Survey
Organisation — which estimated the unemployment rate at 2.8 per cent a
few years ago. That in any case is a number that should give us pause,
one of the lowest rates in the world. Is India’s economy that successful
at providing employment to its people?Obviously not, or the NREGS would
not exist. Indeed, both the oddness of these numbers and their variance
in size demonstrate that the problem lies in the identification of the
unemployed. This is not a new problem: for as long as the Indian economy
has been studied, it’s been understood that more modern notions of
unemployment might not be applicable outside the urban or semi-urban
“formal” sectors. Early on in his career, Amartya Sen had pointed out
that India can post unemployment figures “low enough to put many
advanced countries to shame”, and contributed to the theory of
“disguised unemployment”, where uneconomically many workers work for
whatever they can get, because the actual act of unemployment — being
out of work, and actively looking for work that suits you — is a luxury
for those with no savings and no access to any social safety net.
most countries, unemployment is a clean-cut, easily understandable —
and identifiable — problem. In India, it’s not that simple. The
complexity of our economy, the barbed-wire fence of restrictions that
surround our “organised” sector, the tendency towards seasonal work, and
the networks of caste, clan and kinship that still govern employment in
many parts make answering the simple question “How many of India’s
workers are unemployed?” very difficult indeed. The labour ministry has
just conducted a survey in 300 Indian districts of people aged between
15 and 59, and estimated that 9.4 per cent of them are unemployed. This
diverges widely from the estimate of the National Sample Survey
Organisation — which estimated the unemployment rate at 2.8 per cent a
few years ago. That in any case is a number that should give us pause,
one of the lowest rates in the world. Is India’s economy that successful
at providing employment to its people?Obviously not, or the NREGS would
not exist. Indeed, both the oddness of these numbers and their variance
in size demonstrate that the problem lies in the identification of the
unemployed. This is not a new problem: for as long as the Indian economy
has been studied, it’s been understood that more modern notions of
unemployment might not be applicable outside the urban or semi-urban
“formal” sectors. Early on in his career, Amartya Sen had pointed out
that India can post unemployment figures “low enough to put many
advanced countries to shame”, and contributed to the theory of
“disguised unemployment”, where uneconomically many workers work for
whatever they can get, because the actual act of unemployment — being
out of work, and actively looking for work that suits you — is a luxury
for those with no savings and no access to any social safety net.
The plain fact that
our economy still suffers from these age-old diagnostic problems 20
years after 1991 is a reminder that the formal sector needs to expand.
Yet labour laws, the main constraint on expansion, continue to be off
the agenda for UPA-II. To fix underemployment, the NREGS is simply not
enough.