Promising freebies to people has become a trick adopted by many political parties in India. It seems to be a way of bribing the voters. The BJP in U.P. promised scooters to female college-goers and free electricity for farmers; the Aam Aadmi Party in Punjab promised 300 units of free power to every household and Rs. 1,000 monthly allowance for every woman. U.P. has 2.3 crore farm holdings and Punjab has 55 lakh households. Hence thousands of crores of rupees will have to be spent just on power promises. 

Providing freebies is not going to be sustainable. It can lead to an increase in the debt of the government that can result in a serious economic crisis. In the long run, people will have to bear the consequences of irrational and unsustainable economic policies, as it is happening in Sri Lanka.

Indeed, the poor need safety nets in the form of food security, mid-day meal, old age pension, widow pension, etc. It is the responsibility of the government to provide safety nets to the poor. MGNREGA, the 100 days employment scheme, in the rural areas was found to be a blessing for millions of migrant workers who returned to their villages during the nationwide lockdown. 

Besides providing a safety net to the low income groups, it contributes to building rural infrastructure and enhancing the natural resources. The Jharkhand government is making use of MGNREGA for replenishing water, forest and land, which constitute the backbone of tribal life and economy. Instead of increasing the outlay for MGNREGA in the post-pandemic period to boost rural economy, the Union Government reduced the outlay in the current year’s budget.

What the people, especially the poor, need is employment so that they can earn their livelihood and live with dignity instead of depending on the state for meeting their basic needs. But joblessness in India has reached an alarming situation. 1.25 crore candidates applied for 35,000 posts in Non-Technical Popular Category (NTPC) in the Indian Railways a few months back. It shows the enormity of unemployment in India today. 

Thousands of young people, who had appeared for the recruitment exam, blocked trains in Bihar and some cities in U.P. in protest against the results released in January. They also indulged in violence and the police had beaten up many young people. The protests by the youth in Patna and some parts of U.P. is an outpouring of the simmering restlessness among the young people on account of joblessness. It indicates a demographic disaster-in-waiting.

Growing unemployment in India is not merely the result Covid 19; the pandemic aggravated the problem that was already in existence. According to the National Sample Survey Office, the country’s unemployment rate, in the last four decades, was the highest at 6.1 per cent during 2017-18, compared to 2.2 percent in 2011-12. As per the data released by Centre for Monitoring Indian Economy (CMIE), unemployment was 7.9 per cent in December 2021, with 53 million jobless people.

As highlighted in an article, ‘State of Jobs’ by Ashutosh Bharadwaj in Outlook, February 21, 2022, the number of people employed in the country came down from 407 million in 2016-17 to 378 million in 2021. While more people entered the market in search of jobs, the economy couldn’t sustain even the previous number of jobs. The “Make in India” Programme launched by the Prime Minister in 2014 couldn’t make much progress in creating new jobs. Because of the pandemic and the lockdown, millions of migrant workers returned to villages and it pushed down wages in the rural areas.

At a time when unemployment is increasing, some of the policies of the government are adding to joblessness. The government policy appears to be pushing for contractual workers, who get low salary, often not paid on time, and have no job security. According to the Railway Minister, Ashwani Vaishnav, over 2.65 lakh posts are vacant in the railways. Similarly in other departments also many vacancies are available, but the government seems to be hesitant to fill up these vacant posts through regular recruitment process.

P Chidambaram, former Finance Minister, wrote in February 2022 in The Indian Express about the reluctance of the Union Government to fill the vacant posts. As per the data provided by him, on March 31, 2021, there were 8,72,243 vacancies in the Central government and the government filled only 78,264 of them. Nearly 8 lakh posts are vacant!  Chidambaram has pointed out that in the health sector alone India needs 7,50,000 personnel as gynaecologists, anaesthetists, paediatricians and radiologists, whereas the country has only 1,60,000 of them. 

All departments of the government have the opportunity to provide jobs without investing huge amounts of money. But the government has to change its attitude that “small government is good government”. Chidambaram has suggested that “MSMEs, particularly small and medium units, are the most prolific job-creators and hirers. Once jobs are created, they will start their own virtuous cycles -- related jobs, incomes, wealth, tax revenues, care for the environment, charity, support for the fine arts and literature, and so on”.

The BJP came to power in 2014 with the promise of creating 10 million jobs a year. Despite 8 years of the Modi government in power, employment rates are dismal. The government in power has to introspect on why it has not been able to fulfil one of its core promises.

It took many controversial steps to fulfil its promises related to its ideology, which resulted in division and disharmony in Indian society, besides huge economic loss. Passing the three controversial farm laws without much consultation with the stakeholders, and their repeal after one year because of the consistent and determined resistance from the farmers, is an example of its failure in good governance. 

It seems that the government that had promised good governance has priorities in reverse gear, and as a result governance has taken a backseat. Counter-productive policies like demonetization and unplanned GST implementation did unprecedented damage to the informal sector and micro and small enterprises, on which 90% of the country’s workforce depends.

Job creation requires short term and long-term policies. As millions of people lost jobs during the last two years due to Covid 19, the government has to take steps to create jobs in the short run. Giving incentives to small and medium industries, which have scope for generating a large number of jobs, is to be considered on a priority basis. Similarly, the government has to allot more money for skill development and skill upgradation, and efficiently implement the Skill India programme. Government also has to invest more in the profit-making public sector units instead of privatizing them.

Instead of giving freebies, the governments have to invest more in education and health care facilities. Without enhancing knowledge and skills of the young population, India will not be able to take the benefit of “demographic dividend”. India has more than 50% of its population below the age of 25 and more than 65% below the age of 35. If skills of this vast ocean of young people are not enhanced, they may become a burden on the economy.

The policy of providing good quality education to the rich and poor quality education to the poor is contributing to the gap between the rich and the poor. Instead of wasting money on advertisements and frivolous projects, the governments have to improve the quality of education imparted through the government schools and colleges. 

Spending crores of rupees on erecting statues and projects like the Central Vista has no justification. Pandering to the emotions of people may fetch votes, but economic growth and employment generation are bound to suffer.

Economic growth that leads to the skyrocketing of economic inequalities is not sustainable. The Oxfam report 2022 has described India as a ‘very unequal’ country, as the top 10% of people of India holds 57% of the wealth. On the other hand, the share of the bottom half is 13%. The report has recommended taxing the rich to invest in education and health. Unfortunately, India had reduced the corporate tax rate to 22% from 30% and to 15% from 20% for new manufacturing companies in 2019. Thus, the government had to forgo rupees 1.5 lakh crore in direct tax collection.  According to a number of economists, India has to focus on the demand side rather than on the supply side and reduction in direct tax is not an appropriate solution.

Not only the ruling party, but also all political parties have to desist from promising and providing freebies to people and focus on economic policies that can propel economic growth along with job creation and income distribution among all sections of society.