Commentary

Find our newspaper columns, blogs, and other commentary pieces in this section. Our research focuses on Advanced Biology, High-Tech Geopolitics, Strategic Studies, Indo-Pacific Studies & Economic Policy

Strategic Studies Shrikrishna Upadhyaya Strategic Studies Shrikrishna Upadhyaya

Indian Express | Agnipath 2.0: A solution for armed forces and applicants

By Pranay Kotasthane

The future of the Agnipath scheme is a pressing concern for the new government at the Centre. The narrative that this scheme dampened the NDA’s prospects gained momentum during the election campaign. The spokesperson of the JD(U), a key NDA partner, has publicly stated that the scheme upset some sections and needs to be modified. Despite these political rumblings, there is a noticeable lack of specific alternatives to address the original problems that led to the crafting of the Agnipath scheme. This article proposes an “inverse induction model” as a solution to make Agnipath 2.0 meet its operational, political, and fiscal objectives. Read the full article here.

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Economic Policy Economic Policy

Jobs From Abroad

This is the fifth edition of The Jobscape, our weekly round-up of news and opinion on the state of employment and job creation in India. In this edition, we look at how international trade creates jobs in India, how many ‘Australias’ of jobs India has to generate, our abysmal gender bias, and job scams.Read more

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Economic Policy Anupam Manur Economic Policy Anupam Manur

What Explains the High Demand for Low Paying Government Jobs?

We are increasingly seeing the phenomenon where there are an enormous amount of applicants for a few government postings. The big obvious question here is regarding the inexplicably high demand for low paying government jobs by apparently overqualified job seekers.

My hypothesis is that this can be explained by three factors:

  1. The number of private jobs available is obviously too few. Job creation has stagnated and even receded in the private sector. Thus, the industry does not have the capacity to absorb a large number of graduates and post-graduates who are passing out of the system. Since the supply of labour far outstrips the demand for labour, employees have increasingly stringent qualification requirements. Only the best of the lot get a good, high paying job in the private sector.
  2. There is also an obvious skills mismatch. A lot of the students who pass through the Indian education system are not as qualified as their degrees tend to signal. A typical Post-Graduate often has the skills of a person who has passed the 12th grade and thus, cannot obtain or at least retain a high paying job which would require the skills of a Post-Graduate (One report, for instance, finds that nearly 80% of the engineering graduates in India are unemployable as their skills set do not match the requirement of the industry). What further complicates this issue and turns it into a vicious cycle is the fact that a lot of individuals end up studying due to the lack of job opportunities. These are students who enter into an educational programme solely due to the signalling value and to differentiate themselves from the nearest competitors. However, while the degree gained has some signalling value, the skills gained are inadequate for industry standards.
  3. A person who has gained a degree but not the appropriate skills cannot get a job in the private sector which will assure a reasonably high salary and job security. The private sector option is typically a low paying job, which can be lost at any time and with no benefits. Given this scenario, a government job that is assured of job security, even at the cost of a lower salary seems attractive.

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Economic Policy Anupam Manur Economic Policy Anupam Manur

But What About the Jobs Crisis?

Job creation remains India’s biggest economic challenge. Analysing the 2018 union budget through the jobs lens is bound to leave one disappointed. The first impression is that the gravity of the employment situation has not descended on the present government. Focusing on small and micro-enterprises and entrepreneurship will not deliver the amount of jobs that is required.

There was a big push for the MSMEs in this year’s budget. The Finance Minister emphatically stated that “Medium, Small and Micro Enterprises (MSMEs) are a major engine of growth and employment in the country,” and went on to allocate Rs 3794 crores (quite a small number) to the MSME Sector for giving credit support, capital and interest subsidy and innovations. This was lauded by many as a policy push in the right direction.

The wide-ranging consensus on the importance of MSMEs in India is impressive. There is near universality in declaring MSMEs to be the engine of economic growth in India and the driver of job creation. Just for clarity on terminology, a micro enterprise employs less than 10 people, a small enterprise less than 50 people and a medium enterprise less than 300 people. This definition is according to the World Bank, though countries often classify them according to the initial investment (India), turnover, and other criteria.

There are numerous reports, even by reputed consulting firms, that speak about the benefits of MSMEs. The reasoning for this is often fallacious. “MSMEs will generate employment in the future, because they provide employment now” is the general reasoning. Imagine if the same thinking persisted in the 1800s when horse carts were the main form of transportation and a major source of employment – chances are that there would be no investment in the railways at all.

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