We might be at a critical moment in modern Indian history. There is some mystery that surrounds the growth numbers, but no one is claiming that there is a clear upsurge in growth. The one thing that is not disputed is that the investment numbers are down, almost 10 percentage points below the 2011 peak, which is worrying to say the least.
Employment numbers have been the centre of much controversy. I will stick my neck out and guess that the rise in reported unemployment is real, but what is behind it is in part a shift in attitudes and not just a sudden shrinkage in the number of jobs available. As Amartya Sen pointed out many years ago, there is often a recognition aspect to unemployment if I am underemployed, work few days every week giving tuitions or distributing flyers for money, am I employed or unemployed There is no right answer, but the answer someone gives to the data collection agency depends on how he feels about it. My guess is that this is now changing more and more of the many who are young and underemployed now see themselves as unemployed, and this begins to show up in the growing unemployment numbers.
This hypothesis fits with the sense of rising expectations among the youth that many commentators have noted. It is also consistent with the fact that a rising fraction of jobs offer provident fund contributions, which is a marker of a desirable job.
The government thinks this is good news. I am less sanguine. In a study of young men and women who had signed up for a training programme leading to precisely those kinds of jobs, only about half of those who got a job offer accepted, and of those, a third quit within the first weeks. The jobs were too unpleasant, our respondents told us. They were from families that could ill-afford this about a third of their households owned a fridge but they just hated it too much.
To make matters worse, the AI revolution is hitting us robots can already do medical transcription and many other things our BPOs do, and they are getting better. We are at risk of losing a lot of our desk jobs. Make in India did not happen, and will probably not happen. Economies like Bangladesh and Vietnam, poorer and cheaper than us, are better prepared to take the jobs that China does not want. The main growth area for jobs is in low-end services, bussing tables, folding shirts in department stores, cleaning patients in hospitals the jobs that our respondents were offered and did not want.
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