Consider this if you will:

You are a young, presentable, bright twenty- three - year old with a brand new degree from a reputable university. You have worked diligently over four years, achieved excellent grades and now you are ready to enter the workforce. Except, there is a small but a rather fundamental problem;

You live in India!

It is estimated that within the next three years India’s labour force will overtake China as the world’s largest, but right now the country is struggling to generate opportunities for an ever-growing workforce. India is suffering from a number of economic malaise ’s; slow growth, a steady decline in investment rates, chaotic economic reforms, an accelerating fall off in agricultural employment and an archaic education system that have all combined to reduce the proportion of Indians who hold proper jobs.

The country is experiencing a dramatic demographic shift, as birth rates have, over the last decade been steadily falling. Today, the share of the population that is of working age has reached its peak relative to the share of children and old people. One would have thought that as long as jobs are available it would begin to lift the rate of economic growth that it so desperately needs. However, the proportion of working-age people actually in work has been falling steadily in a country that is home to a sixth of all humanity.

So, what’s causing this dramatic fall off when it comes to employment opportunities?

On the outskirts of Lucknow, the capital of India’s most populous state, Uttar Pradesh is a medium-sized factory, one of the thousands of small factories that populate a massive, industrial estate. The factory is a family run business that bags and packages herbal teas. Since the mid -2000’s, the owners have been investing in new technology enabling the company to boost output fivefold with no increase in staffing levels. 

That self- same company recently took delivery of several new and improved machines which require only a single operator, meaning that up to ten factory floor workers will lose their jobs once the new machines have been installed. This industrial, or technology revolution is happening across the entire subcontinent. A recent report by McKinsey predicted that new technology could eliminate some 52% of India’s jobs if factories like the one in Lucknow adopt the same principles.

In India’s high-flying IT industry in cities such as Bangalore the last year has seen thousands of workers laid off as new technology and increased automation makes a top-heavy workforce largely redundant.

The story doesn’t really get any better when reading The Economic Times of India who recently conducted a nationwide poll and found that 62% of the country’s workforce felt that their jobs were under threat.

When you are dealing with a population of 1.3 billion the job numbers, or lack of are more than daunting when just to keep unemployment at ‘acceptable’ levels, India needs to create some 10m-12m jobs a year! The government’s data on jobs and job creation is pretty vague as I found when searching online for believable information. It seems that for many years the jobless rate hovered at an enviable 4% but,

like all governments everywhere they are often generous in their definition of what constitutes full-time employment. In 2015 (The most recent study) found that 35% of workers had held a job for less than 11 months. The World Bank in 2017 estimated that over 30% of Indians between the ages of 15 and 29 are NEETs, “not in education, employment or training”.

This frightening figure, however, needs to be treated with caution and a giant pinch of salt as some 86% of workers are reckoned to be in “informal” employment, meaning they are untaxed and without an employment contract.! It would appear that reliable counting and data collection across this vast country is somewhat of a difficult task.

However, even with these lofty and sometimes flawed surveys by outside sources, there is no doubt that the pressure for jobs is real. An example of how unemployment is causing tremendous angst, just last year, many thousands of Jats, a community in northern India who are traditional subsistence small farmers found themselves becoming increasingly urbanised. The upshot was a series of violent riots to press their demands for an expanded quota of government jobs. The result was 25 dead and hundreds severely injured as the rioters took drastic measures when they severed the main water supply to Delhi, India’s capital.

Employment is a constant and ongoing headache for the current government and, for the governments that came before them. The problem often leads to ill thought out schemes that are poorly executed. A recent, massive state program, the world’s largest, created millions of temporary make-work jobs in rural areas that naturally proved to be unsustainable. Another was the creation of a National Skill Development Program whereby some 600,000 workers were trained in various skills and yet at the end of the training period just 12% found jobs.

India also has some of the most complex labour laws on earth with over 44 different labour statutes at the national level and goodness knows how many at the state level. Currently, in many states, Companies employing over 100 employees must seek government approval to fire a single worker. Naturally, firms turn to contract workers to avoid the stifling red tape but this leads to a rather unhappy workforce. Another way that companies avoid the onerous labour laws is to stay small. A recent estimate put the number of firms with less than ten workers at a staggering 98%

With statistics such as these, it is no wonder that India is struggling to maintain growth and raise productivity. The garment industry, for instance, is populated by hundreds of thousands of tiny cottage type factories while their neighbours in Bangladesh and Vietnam have vast factories supplying an ever-increasing global demand, meaning that their garment industries have left India in their wake.

It is not all doom and gloom however as some of India’s biggest industrial firms have found the odd solution. Large factories in India. are more capital-intensive than those of their counterparts in China. In Chennai, Hyundai, a South Korean firm has some 8,500 workers who toil alongside 530 robots. This fully digitised facility turned out 661,000 cars last year, or one every 72 seconds. It ranks second in productivity among the firm’s 34 factories around the world; As Ganesh Mani, the vice president for production put it,“ Here is an integrated cascade between suppliers and the assembly line, meaning that the entire ecosystem is in sync.”

What inspired this article was an advertisement I came across for Indian Railways who are looking to hire 100,000 workers across the network, starting in January. Potential applicants had to apply online and then report to various centres around the country to sit an examination to prove their eligibility. All well and good except a staggering 22 million applications were received inside a week!

The government has to do more to boost growth or the jobs crunch will grow ever more severe. The problem has to begin at a grassroots level and, not just tinkering at the edges but starting with the woefully underfunded and poorly run schools, to fixing a hopelessly clogged legal system and untying that stifling red tape, and then perhaps the county’s infrastructure and ecosystem will indeed be “in sync”.