UNEMPLOYMENT - THE HYDRA HEADED MONSTER

Two news were pertinently disturbing. Sadly we have more disturbing than good news flowing nowadays…

One came yesterday - 32 lakh people have applied for 31,888 vacancies in Maharashtra govt jobs since January this year. This roughly means 100 people vying for one post.

The second news was today – Parle is planning to sack 10,000 of its employees.

Both these news, one from the private sector and another from the public sector go on to highlight one major underlying issue – unemployment.

CMIE has placed the unemployment rate currently at 8.2% and this is -0.1% lower than 8.3% it published on 20^th August, which is the highest in 3 years.

The stress in urban India is much higher with unemployment pegged at around 10%. The biggest stress comes from the auto and allied sector where some 3.5 lakh jobs have already been cut in current fiscal. The total job cut figure, going by the way things are in the sector presently, the job loss is put at around 10 lakh.

Three other major employment providing industries – textiles, real estate and tea are also suffering. According to The Northern India Textile Mills Association (NITMA) - an association of textile mills located in Northern India, textiles industry is facing the worst financial crisis and slowdown, which has forced spinning companies to cut down their production and shut down their mills – some one-third of entire spinning mills in India currently shut down. Exports of cotton yarn slumped over 34% from April to June period. And all this is leading to huge job loss; unofficial reports have placed job loss in textiles and allied sector alone at around 3 lakh in this fiscal.

Unofficial figures put job loss in the tea sector around 1.5 to 2 lakh and the slump in the realty sector is there for all to see; it is apparently staring at a job loss of around 5 lakh.

These figures are surely scary as all run in lakhs and they might be marked up more than what could be the reality on the ground. But irrespective of the mark-up, the fact remains that more number of people are today unemployed than three-four years ago.

And with about 20 lakh people getting added every month to the employment stock, all above the age of 14 years, means we do have a huge unemployment problem at hand.

We keep on harping about the great demographic advantage India enjoys but if this energy and intellect of the youth is not being harnessed, we could have a disaster on hand. Paul Krugman is absolutely right – if India does not create manufacturing jobs soon, our growth story could go phut!