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Resource centre on India's rural distress
 
 

Seeking jobs

Inmost countries, unemployment is a clean-cut, easily understandable — and identifiable — problem. In India, it’s not that simple. The complexity of our economy, the barbed-wire fence of restrictions that surround our “organised” sector, the tendency towards seasonal work, andthe networks of caste, clan and kinship that still govern employment inmany parts make answering the simple question “How many of India’s workers are unemployed?” very difficult indeed. The labour ministry has just conducted a survey in 300 Indian districts of people aged between 15 and 59, and estimated that 9.4 per cent of them are unemployed. This diverges widely from the estimate of the National Sample Survey Organisation — which estimated the unemployment rate at 2.8 per cent a few years ago. That in any case is a number that should give us pause, one of the lowest rates in the world. Is India’s economy that successfulat providing employment to its people?Obviously not, or the NREGS wouldnot exist. Indeed, both the oddness of these numbers and their variancein size demonstrate that the problem lies in the identification of the unemployed. This is not a new problem: for as long as the Indian economyhas been studied, it’s been understood that more modern notions of unemployment might not be applicable outside the urban or semi-urban “formal” sectors. Early on in his career, Amartya Sen had pointed out that India can post unemployment figures “low enough to put many advanced countries to shame”, and contributed to the theory of “disguised unemployment”, where uneconomically many workers work for whatever they can get, because the actual act of unemployment — being out of work, and actively looking for work that suits you — is a luxury for those with no savings and no access to any social safety net.

The plain fact that our economy still suffers from these age-old diagnostic problems 20 years after 1991 is a reminder that the formal sector needs to expand. Yet labour laws, the main constraint on expansion, continue to be off the agenda for UPA-II. To fix underemployment, the NREGS is simply not enough.