“Reality Even More Stark”: Congress On Citigroup’s India Jobs Growth Report
In the light of the latest Citigroup report on India’s jobs growth, Congress general secretary in charge of communications Jairam Ramesh said his party has consistently warned about India’s worsening unemployment crisis over the past five years. A statement said the crisis has been exacerbated by the decimation of job-creating MSMEs due to demonetisation, a hastily implemented GST, and rising imports from China. Congress accused Prime Minister Modi’s economic policies of favouring large conglomerates, leading to India’s highest unemployment rate in 45 years, with 42% unemployment among graduates.
The recent Citigroup report, according to Congress, confirms these concerns, highlighting that India needs to create 12 million jobs annually for the next decade to employ its youth. The party said quoting the report, even with 7% GDP growth, India would fall short, only generating 8-9 million jobs yearly. Under Modi’s government, the average GDP growth has been just 5.8% and there are 1 million Central government job vacancies, and only 21% of the labor force has salaried jobs, down from 24% pre-Covid. The post-Covid recovery has disproportionately benefited the wealthy, while rural real wages are declining by 1-1.5% annually, making rural Indians poorer, Congress said.
According to the report, “Skill India” has failed, with only 4.4% of young Indians receiving formal training. Programs like MUDRA and SVANIDHI have not delivered credit to small businesses, requiring a large-scale revamp. A “living wage” law is deemed necessary, with the Congress advocating for a national minimum wage of Rs. 400/day. The report suggests that job creation in the construction sector should be a priority, recommending a large-scale social housing program.
Citigroup report also notes the declining quality of jobs in India, with 46% of the workforce still in agriculture, contributing less than 20% to GDP. Manufacturing jobs have decreased, and fewer people are employed in the formal sector compared to pre-Covid levels. Self-employment has surged, with more than half of the workforce now self-employed. The official unemployment rate of 3.2% is considered an underestimation, with the Centre for Monitoring Indian Economy (CMIE) reporting a jobless rate of 9.2% in May, the highest in eight months. For those aged 20-24, the unemployment rate exceeds 40%.
Citigroup’s economists propose measures to boost job creation, such as strengthening export potential in manufacturing, extending incentives to attract foreign companies, and filling government vacancies. Consolidating multiple employment generation programs is also recommended for better impact.
