After denying sky-high unemployment for years, Modi Govt finally admits to it & accepts they’re too incompetent to fix it, Saket Gokhale said.Chief Economic Adviser V Anantha Nageswaran challenged the idea that government intervention can solve all societal and economic problems, especially when it comes to tackling unemployment. Speaking at the launch of the “India Employment Report 2024: Youth Employment, Education, and Skills,” co-authored by the International Labour Organisation and The Institute for Human Development (IHD), Nageswaran questioned what more the government can do besides direct hiring.
Nageswaran assumed the role of the government’s chief economic adviser shortly before the presentation of the Budget for 2022-23 on February 1, 2022. He has been vocal about various global issues, including climate finance and challenges in the methodologies employed by global ratings agencies when assessing emerging market countries like India.
Nageswaran said that it’s the private sector’s job to create jobs. “In the normal world, it is the commercial sector who needs to do the hiring,” he pointed out, while listing out the actions taken by the government to spur job creation in recent years, such as the skill development efforts and the National Education Policy of 2020, which he stressed should not “become hostage to political considerations.”
Nageswaran also spoke about tax breaks for companies paying salaries and subsidies for provident fund contributions, stating that the tax system now favours job creation.
“Indeed, we can state very confidently now that the tax code no longer favours capital accumulation over employment generation,” he said.
Referencing the 1970s satirical film “Mohammed bin Tughlaq,” written and directed by Cho Ramaswamy, Nageswaran drew parallels to current challenges, suggesting limitations in governmental responses to unemployment.
There is “an element of truth” in what the film’s protagonist, who becomes the fictional country’s Prime Minister and seeks to address problems like corruption, says about unemployment, he said.
“For unemployment, he simply says, ‘Look, all I will do is I’ll keep talking on every dais and stage that we have to solve the unemployment problem, and that is my contribution to solving the unemployment problem. Because this is not something I can address’.”
He questioned the unintended consequences of welfare policies meant to alleviate unemployment’s negative impacts, expressing concerns about their potential to disrupt labour market dynamics.
“In every public policy intervention, there is always the law of unintended consequences… In general, humans change their lifestyles and habits only when doctors read the riot act on behalf of the human body. Does it not apply to our youth and others in respect of their willingness to work or efforts to equip themselves with skills and attitude towards work?” he said.
Rajya Sabha MP and Trinamool leader Saket Gokhale posted on X (formerly Twitter): “And finally – the truth of “Modi’s Guarantee” comes out. Chief Economic Advisor of PM Modi now says “govt cannot solve unemployment”. After denying sky-high unemployment for years, Modi Govt finally admits to it & accepts they’re too incompetent to fix it. This is “Modi’s Guarantee” – all fluff & lies.”
Nageswaran holds a PhD from the University of Massachusetts Amherst, specialising in exchange rate behaviour. He also obtained an MBA from the Indian Institute of Management, Ahmedabad. He served as a part-time member of the Economic Advisory Council to the Prime Minister from 2019 to 2021. He has also taught at several business schools and management institutes in India and Singapore. In his corporate career spanning 17 years, Nageswaran worked with leading institutions such as UBS, Credit Suisse, and Julius Baer.