10 Years of Modi: Shrinking Pie of Organised Sector Jobs

It has been argued by denizens of the neoliberal project that government employees and teachers (along with employees in the private organised sector) constitute a “privileged” stratum with respect to the vast mass of the working people, most of whom are informally engaged in the unorganised sector. But the data tells a different story.

In 2014, during the last year of the United Progressive Alliance government, the top 1% of Indians had 21.4% income share, which increased to 22.6% in 2022 and their wealth share increased from 30.4% to 40.1% over the 10 years of the National Democratic Alliance regime led by Narendra Modi.

Clearly, the greater rise in the wealth, when compared with the income share of the top 1%, is reflective of the acceleration of the primitive accumulation of capital under the current neo-fascist dispensation. The top 10% of the population had 56.1% income share in 2014 (when Modi came to power), which rose to 57.7% in 2022 and their wealth share increased from 62.6% to 65% during the same period.

The income and wealth shares of all remaining Indians fell, though the squeeze was felt differently by the bottom 50% and middle 40% in different ways during various periods.

In other words, what has been transpiring in India is the enormous concentration of income and wealth among billionaires and multimillionaires at the very top (not only the top 1% but also the top 0.1%, the top 0.01% and the top 0.001%!) to the (differentiated) exclusion of everybody else.

Let us now turn to a brief examination of economic conditions of workers in the organised sector since 2014, especially government employees, workers in organised manufacturing and teachers.

The government of India has been a signatory to agreements concerning 17 Sustainable Development Goals (SDGs) since 2015, for addressing underdevelopment challenges among the UN (United Nations) member countries. SDGs 8 and 10 involve the aspiration to ensure decent employment opportunities and reduce income and wealth inequalities within and between the countries.

Even SDGs 1 and 2 involve the aim to reduce poverty and ascertain zero hunger and starvation deaths by 2030. All this would require a manifold improvement in the economic conditions of workers in terms of wages, work conditions and social security.

This article seeks to address issues and challenges involving unemployment and under-employment, especially declining decent employment opportunities, especially regular jobs in the government as well as in the private sector during the 10 years of the Modi government.

The neo-fascist dispensation has shown virtual disdain toward its legal commitment to achieve SDG targets of reducing poverty, hunger, inequality and improving decent employment opportunities. An instance of this disdain is illustrated by unkept promises of the Modi regime, which they proclaimed in the run-up to 2014 parliamentary elections, including the creation of two crore jobs per annum and the transfer of Rs. 15 lakh to each bank account holder. Thus, SDGs remain unfulfilled in India. Furthermore, it is arguable that there has been a regression in this respect since 2014. Let’s see how.

Indian Job and Income Challenges

Table 1 shows that the working age population increased from 968 million in 2017-18 to 1,021 million in 2021-22, according to the Status of Working Report (SWR) 2023. However, it is important to ensure decent jobs in the labour market for using the available labour capacity for socially productive purposes.

The labour force and workforce also increased from 468 million and 427 million, respectively, to 528 million and 493 million over the years. The labour force participation rate (LFPR) also increased from 48.4% to 51.7% and the worker participation rate (WPR) increased from 44.1% to 48.1%. These absolute numbers and rates based on PLFS (periodic labour force surveys) have limitations and this requires the use of Centre for Monitoring Indian Economy (CMIE) data.

It can also be understood that earnings have been largely stagnant during the Modi regime’s 10 years. The monthly earnings of the self-employed declined slightly from Rs.12,318 to Rs. 12,089 over the initial four years, monthly casual wage slightly increased from Rs. 6,959 to Rs. 7,856 and the regular wage earnings stagnated at Rs. 19,450 in 2017-18 and Rs. 19,456 in 2021-22. This wage stagnation amounts to a real wage decline when we take into account inflation during this period.

Further, the State of Working India Report (SWR) 2023 highlighted that unemployment rates of the youth in the age-group of less than 25 years, by education, are alarming during 2021-22: graduates (42.3%), high secondary (21.4%), secondary (18.1%), primary and middle (15.0%), literate but below primary (10.6%), illiterate (13.5%). This shows that the increase in education is broadly associated with higher unemployment, which amounts to a perverse waste of labour capacity. We examine a possible explanation of this perverse phenomenon later.

A fundamental cause of this unemployment is that neoliberalism involves a squeeze on working people as a whole and in all countries that are in thrall to global finance. But this squeeze is differentiated across different countries and among different segments of the working people in each country. This differentiation is driven by a quest to increase the obduracy of the neoliberal project.

As mentioned previously, the data based on the PLFS has limitations. A more comprehensive picture about employment and unemployment, especially among the youth, can be better arrived at by additionally using data from CMIE. The Figures 1.1 and 1.2 show that labour force participation rate (LFPR) declined from 47% in January-April 2016 to 40.2% in May-August, 2021.

The employment rate has declined from 42.8% to 37.4%, declining to a level that is less than 40% of employment rate. More adverse is the fact that the youth unemployment rate (from Figure 1.2) is currently at 45.4% in 2022-23 having increased sharply from 29% in 2016-17.

A further trend of grave concern that may be gleaned from CMIE data is on female paid labour force participation rate, which has declined drastically from 14.9% in 2016-17 to 8.8% in 2022-23.

In the next section, we argue that a steady decline in government job opportunities and increasing contractualisation and casualisation of workers in India under the Modi regime has adversely impacted the entirety of the working people and is a driver of all these aforementioned adverse trends.

Govt Employment: Rising Contractualisation

Four important features are examined in this section: (i) declining number of government jobs during the Modi regime, (ii) lower growth rate of government jobs in post-Covid years, and (ii) increasing contractualisation of workers in government jobs and (iv) increasing casualisation of workers. These four features are examined jointly.

Figure 2.1 makes clear a declining trend of Union government jobs. Total number of employees working in Central Public Sector Enterprises (CPSE) were 17.3 lakh and 16.9 lakh during 2013 and 2014 of UPA-II regime. In the Modi regime, the corresponding numbers were 15.1 lakh in 2019, 14.7 lakh in 2020, 13.7 lakh in 2021 but marginally recovered to 14.6 lakh in 2022, however it still remains below what it was in the pre-Covid period.

Moreover these numbers are 2.6 lakh lower than the numbers during the UPA period as of 2013. It is clear that the Modi government is fully complicit in the neoliberal project’s quest to attenuate public employment in order to further strengthen capital.

Figure 2.2 shows the shares of contract workers in CPSE, which were 16.8% and 18.3%, respectively, during 2013 and 2014, which has now increased to 34%, 35% and 35.6% during three years 2020, 2021 and 2022 of the Modi regime. The share of contract workers in government has more than doubled in nine years. Along with contractual workers, daily wage workers and their share has also increased in the CPSEs by 0.6 lakh from 0.4 lakh (2.3%) in 2013 to 1 lakh (6.8%) in 2022 (as shown in Figure 2.2).

Not only have these trends adversely impacted the bargaining power of workers it has also had a self-evidently deleterious impact on governance. As regards the former, a larger magnitude of permanent public employees will firstly increase aggregate demand along with output, employment and wage rates in the private sector (and, therefore, private investment) since such permanent public employees will obtain higher wages compared to those elsewhere.

But a rise in the magnitude of permanent government employees will also stabilise aggregate demand since the wage bill of such employees does not fluctuate along with output. This stability of aggregate demand will tend to increase investment which will further increase aggregate demand, output, employment and wage rates in the private sector.

Lastly, wages and working conditions in permanent public employment provide a benchmark for wages and working conditions in the private sector.

In India, a worsening of public employment, especially since 2014, has adversely impacted employment in the private sector. Thus, the Indian organised manufacturing sector also experienced an increase in the number and share of contractual workers during the tenure of the Modi government. Let us briefly examine this trend in the next section.

Source: Figure constructed by authors using secondary source data  

Expanding Contractualisation in Manufacturing

Figure 3 shows total workers increased from 104.4 lakh in 2013 to 136.1 lakh in 2023 in the Indian organised manufacturing sector. However, these increasing numbers do not involve any improvement in employment conditions as the share of contractual workers increased in this sector significantly by 6.6% point from 33.6% in 2013 to 40.2% in 2022 (Figure 4). This is a direct result of the growing proximity between (at least some sections of) corporate capital and the neo-fascist dispensation since 2014, as reflected in the policies of the latter.

It needs to be reiterated here that this rising trend of contractualisation in the private manufacturing sector would not have been possible without the policy induced deterioration in the magnitude and conditions of public employment, as was pointed earlier.

Next, we turn to an examination of employment in the higher education sector, which is both a source of labour demand as well as a supplier of skilled labour to the rest of the economy.

Lower Employment Growth, Increasing Privatisation

In the Indian higher education system, the numbers of teachers and non-teaching staff stagnated during the Modi regime, as reflected in Figures 5 and 6. The numbers of teachers and non-teaching staff, which were 1.4 million and 0.98 million, respectively, in 2013-14, increased to 1.6 million and 1.21 million in 2021-22, showing sluggish growth rates over 8 years. The respective rates of growth of both categories was merely 2.1% and 2.8 %, respectively, over almost a decade.

This stagnation is reflective of the proclivity of the neo-fascist dispensation to prioritise short-term interests of corporate profiteering (through privatisation) over the long-term interests of even capital of providing skilled labour power in the Indian economy. It also demonstrates the vacuousness of the tall claims about India being a knowledge economy. There remains the question of labour demand, which will be dealt with later.

The scale of privatisation in higher education expanded over the years with the share of private colleges increasing from 75% in 2013-14 to 78% in 2021-22 (see Figure 7). Typically, private higher educational institutions levy fees on students that, on average, vastly exceed those in place in public higher educational institutions.

Since, students from families of the working people will typically seek to finance a largish part of these fees through loans, their “asking” wage from prospective employers (that will cover their loan repayment) will tend to exceed the paltry wages that they are likely to obtain if they are offered employment. This will tend to increase unemployment among the more educated.

Besides, the tendency for labour productivity to run ahead of the growth rate of output (in an ensemblar fashion with rising inequality) has resulted in a labour displacing trajectory of growth

Moreover, by paying teachers paltry wages, the quality of the teaching-learning process has tended to decline under the neo-fascist dispensation, notwithstanding the best efforts of many teachers. Communalisation of education along with barefaced intimidation has been deployed to try and manufacture “consent” for the neo-liberalisation of higher education that is centred on exclusion (of the socially oppressed and the working poor) through privatisation. For reasons of brevity, we do not discuss the issues facing employment of teachers and non-teaching personnel in schools. But the same adverse trends visible in Indian higher education are visible there too but to a greater degree.

INDIA Bloc’s Policy Proclamation on Employment

The four aforementioned features regarding India’s jobs profile, the travails of employment in the organised manufacturing sector and the attenuation of higher education demonstrate the urgent need for an alternative policy with respect to employment.

The alternative employment policy that is put forward by the Opposition parties of the INDIA bloc in their manifestos begins with the promise to generate 30 lakh jobs in the Union government departments and institutions, including schools, colleges, and universities. This involves a fundamental break with the neoliberal project. However, this expansion of public employment if it is to be sustainable (in combatting the neoliberal project) must involve a process of political mobilisation so that employed workers do not become mendicants who passively receive munificence.

The detailed breakup of this promise of employment generation is as follows: Central government department and ministries (910,153), public sector banks (200,000), public health (168,480), Anganwadi ( 176,057), central government universities (18,647), central and Navodaya Schools (16,329), Primary State Schools (837,592), IIT/IIIT/IIM/NIT (16, 687), Indian Army (107,505), Central Armed Police Force ( 91,929), State Police (531,737), Supreme Court (4), High Court (419), Additional Session Courts (4929), Allied Central Educational Institutions (1662). These numbers add up to the proposed number of government jobs of 30 lakh or 3 million.

However, this expansion of public employment will require a devolution of financial powers to the state governments. A move in this direction will involve a second break with the neoliberal project.

Conclusion

In this article we have sought to argue that decent employment is a fundamental issue in the current conjuncture of India’s political economy. We deliberately placed emphasis on the organised sector to rebut the neoliberal talking point that workers in the organised sector are “privileged”.

The Modi government’s deep enmeshment in the neoliberal project has meant that the Seventh Pay Commission was at best middling and this government has refused to constitute the Eighth Pay Commission in a break with past practice since 1947.

Moreover, the Modi government has adamantly refused to reconsider its furthering of vulnerability and social insecurity through the National Pension Scheme (NPS). However, Opposition party governments in few states, like Himachal Pradesh, Jharkhand and Punjab, have initiated a return to the Old Pension Scheme (OPS), which involves a defined benefit pension to retired government employees. Building on this, the INDIA bloc is campaigning for a setting up an Eighth Pay Commission and replacement of NPS with OPS.

However, the possibility of a sustainable alternative to neoliberal policies requires corresponding policies for workers in the unorganised sector too. These will include: first, the expansion of the employment guarantee programme to urban areas and payment of living wages; second, the institution and augmentation of a universal defined benefit pension scheme for all citizens; third, augmentation of healthcare and education access to all eventually through the expansion of public healthcare and public education. Together these measures would constitute a fourth break with the neoliberal project.

Contrary to the claims of the denizens of the neoliberal project, the public expenditures required to implement these alternative policies will be partly self-financing through the government expenditure multiplier, which will increase tax revenue. The rest of the required resources could be mobilised through progressive wealth and inheritance taxes, which will constitute a fourth break with financial capital. This fourth break with the neoliberal project will need to be fortified with the introduction of capital controls on international finance capital to make the proposed process sustainable in terms of political economy.

Narender Thakur is professor, Department of Economics, Dr. BR Ambedkar College, University of Delhi. C. Saratchand is professor, Department of Economics, Satyawati College, University of Delhi. Vipin Negi is professor, Department of Commerce, Keshav Mahavidyalaya, University of Delhi.