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No assembly line for jobs

There is only a demographic nightmare, no dividend, says former director of Infosys Mohandas Pai in the blurb of this book by award-winning financial journalist Goutam Das

This book will not give you any easy answer to the political conundrums that are coming up repeatedly in election season: Did the NDA government make any dent in unemployment? Would a UPA coalition be able to do so? Or should people just sit at home and wait for the doles to be credited in their bank accounts?

As any journalist would, Goutam Das combines ground reports, conversations with experts and analysis of global trends to give a picture of the jobs front that is at best a patchwork quilt. This eclectic approach merely leads the reader ‘from cocksure ignorance to thoughtful uncertainty’, as one wit described the process of education. Not recommended reading for any impatient member of the present generation, with their short attention spans.

First, the facts. The Centre for Monitoring Indian Economy (CMIE) pegs India’s unemployment rate, as of November 2018 at 6.62%. This sounds like a low number, but the truth — as it has been since independence — is that it disguises a high rate of underemployment, defined as jobs that don’t pay well (chowkidars come to mind, naturally), jobs hardly worth doing and jobs for which they are overqualified. The solution is to improve ease of doing business (and exiting from a failed business) but there is a “difficult credit environment” as the banking sector groans under NPAs. And it is not creating jobs in its own offices either.

The mismatch between supply of trained labour and demand is a major headache for planners, who have tried to meet the challenge with the Skill India programme. The manufacturing sector is not growing enough. The piquant example the author follows throughout the book is of a young mother from Odisha whose husband has gone abroad to work. She trained with 58 other women under the DDU-GKY, a placement programme for the rural poor started in 2014. She goes to Tirrupur to work in a garment export company. But there is a high attrition rate as such migrant workers often drop out due to poor living conditions, food habits and general homesickness.

The jobs dilemma is different for the well-heeled. Should parents from the middle class still try to steer their progeny into becoming doctors and engineers? The medical field is left untouched by this book, but for engineers, the statistics are startling. “The gap between students who graduate from engineering colleges and those who are placed in jobs is widening,” writes Das. “In 2012-13, the number of students who were not placed was 6,59,981according to the latest available data from the AICTE (database uploaded in October 2018). By 2016-17, this number had increased to 8,13,804.”

What is going on? Over 8 lakh engineering graduates without jobs? It turns out that digital and e-commerce startups went from boom to bust after 2015. In the telecom sector, there were 40,000 job losses in 2017, and the number could go up to 50,000 in 2018. The IT sector is in consolidation mode after the growth spurt, and is using robots for coding, testing and infrastructure maintenance.

The book raises the red flag about the loss of jobs to automation, cobots (smaller in size than robots and able to move around the factory floor easily) and artificial intelligence. HDFC Bank has Eva, a chatbot who in 2017 answered five million queries from customers, doing the work of 350-700 employees, a number that could go up further.

Das also touches on the impact of global developments. Did you know that Indian BPOs such as Genpact, EXL and Mphasis moved their call centres to the Philippines, a former colony of the US, to get better rapport between callers and call handlers? The McKinsey Global Institute predicts that about 30% of hours worked globally could be automated by 2030; in India, 9% of current work hours could be automated by that date, just 11 years from now. In ready-made garment exports, India has a market share of 3.8% (2017 figures) while China leads with 32% followed by Bangladesh, Vietnam, Italy and Germany. Yes, we are sixth in the row.

A basic reason why the demographic dividend appears a myth is because India’s education sector is in steep decline, thanks to its inability to keep pace with a fast-changing world. Rote learning seems to have served us well in the past, helping our students excel in the US and UK. But now the world needs youngsters capable of independent thinking. “Administrators and principals of most Indian public schools are not exposed to such international practices, or how the world of education is changing,” writes Das. “Among many in the government, there is a resistance to ideas that are ‘firang’. However, India, in economic terms, is not ‘decoupled’ from the rest of the world. Exponential technologies don’t have borders and neither should the preparation for making children ready for Industry 4.0”

While this book is an easy read, ideally at the rate of one chapter a day, it does not leave one with a sense of satisfaction at having mastered the subject of jobs. A much more sensible structure, and one more useful to the reader, would have been a sector-wise analysis. What are the job prospects in medicine, engineering, marketing, IT, exports, the armed forces and government? Are law, media, chartered accountancy and architecture good lines to take up? What kind of jobs are available for high school passouts, graduates and post-graduates? Which are the areas in which the self-employed are doing well? The title Jobonomics suggests that the author wants to treat the subject as an economist would. But that exercise is best left to think-tanks and does not suit the mass market for books.