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India's Missing Jobs

Via Rajesh Jain:

India's economy is spawning a growing middle class, a host of world-class companies, a booming stock market and a new image for this nation of more than one billion people.

But those very reforms and conditions are also reducing the prospects of some of its citizens. India may be "shining," in the description of a controversial and expensive government publicity campaign, but it is also struggling to generate jobs.

This southern state [of Andhra Pradesh] and its chief minister, N. Chandrababu Naidu, capture the challenge facing India as a whole. The lack of work here is bad among educated urbanites, and worse in rural areas, where two-thirds of the work force lives and depends on nature's bounty. Severe drought - and a lack of irrigation and power to ease it - have prompted migration and farmers' suicides, and helped sustain a tenacious left-wing insurgency that nearly succeeded in killing Mr. Naidu last October.

Over time, predicts S. P. Gupta, a member of India's planning commission who specializes in employment, the social consequences of jobless growth will become more severe, whether in mass migration, or in riots like those that broke out last fall when 600,000 people applied for fewer than 3,000 low-level railway jobs.

In part, Mr. Naidu's blandishments reflect the dynamics of the global rush to India. As more cities, from Bangalore to Chennai (formerly Madras), compete for information technology companies, the companies have the leverage.

But it is not clear how much his state is getting in return when it comes to jobs. While nearly 60,000 jobs in information technology have been created here, many have gone to young Indians from across the country, despite this state's 350,000 English-speaking graduates.

Since taking office, Mr. Naidu has increased the number of engineering colleges from 32 to around 230, and the number of graduates from 8,000 each year to 75,000. By the end of 2002, the state had around 2.6 million educated unemployed residents.

World is Green : Suhit Anantula's Blog on Rural India writes:

She says that India is booming but says But those very reforms and conditions are also reducing the prospects of some of its citizens. I am not sure how the reforms are reducing the prospects. The employment problem is the main issue and that is something which cannot be denied. India will have 10 million citizens joining the ranks of the "employable" every year. We already have a official "80 million" unemployment rate..so yes, things are tough here.

As she rightly says, The public sector, once a stalwart of security, has lost some 4.5 million jobs in the past six years. In this state, Andhra Pradesh, government recruitment has been frozen and the government has cottoned to private sector practicalities. This almost sounds like govt. of AP is making am mistake. Shouldn't the government be more efficient and manage their finances better.

The whole argument is now based on Street sweeping which was once a government job that paid triple what it does now and came with medical care, a pension, annual leave and job security, has been outsourced to private contractors, who offer none of that. So is there some thing wrong with that. Is there anything wrong with outsourcing sweeping. I think this is the right thing to do.

And what is the result of this outsourcing The streets of Hyderabad have never been cleaner, the city's budget never leaner, and for workers, the insecurity and indigence never greater. On a Friday afternoon, Mr. Bhaliya, who uses only one name, was working two hours past his shift's end - for no overtime pay - to ensure the chief minister a dustfree view when he drove past. Why is the Chief minister targeted here. I am happy to see a dust free road. Why is Washington D C clean? For the President of USA or for all the citizens. And C'mon there are a lot of people who do overtime without being paid, even Walmart's outsourced sweepers do that.

And this statement is a cheap attack on the Chief minister, which seems to be the main goal of the article. Even as a lack of water has devastated farmers across the state, Mr. Naidu has ensured Vanenburg IT Park, the idyllic 20-acre campus where Deloitte India and others sit, enough water for meticulously landscaped grounds year-round.

She then provides two great examples :

But even his sweeping job could be swept from under him. Rajiv Babu, the city's deputy executive engineer for solid waste management, said he regularly got offers from both foreign and Indian companies to mechanize the sweeping.

For now, it was still cheaper to use manual labor, although he noted, "As an engineer, I would love to mechanize the whole thing and forget about it."

In some sectors, that has already happened. Outside Mr. Babu's window, a new road overpass was being built. Such projects, he estimated, now require 60 percent less labor than they did a few years ago, thanks to ready-mix cement.

Isn't the whole basis of US economic miracle, productivity. Why was the country happy when it had a record 9% productivity growth in recent months?

India needs to be more productive to be a more economically developed country. If this means some jobs are lost, fine. The problem which needs to be solved is employment, not decreasing productivity.

I am shocked the Nytimes is carrying an article like this.