Jobs and inflation: Persistent challenges in elections
Jobs and inflation are perennial issues in every election, whether in Indian states or at the national level, and globally. No government has ever managed to control them for any reasonable length of time.
While other factors may vary from election to election, jobs, and inflation remain constant and prominent concerns in every election since Independence.
Even when inflation, especially food inflation, is kept within reasonable limits, people always perceive price increases as a problem. They may tolerate it up to a point, but human nature is insatiable.
Technological advancements, such as robotics and AI, will continue to eliminate many old jobs. Although some of these jobs will be replaced by new roles requiring higher skills, this transition often leads to the disappearance of numerous low-skilled jobs and the creation of fewer, more skilled positions. This is an inevitable aspect of human evolution, though no political party would openly admit it.
PM Modi has won a third consecutive term, not because he has resolved the unemployment issue over the past decade, but because a significant percentage of voters believe he has been trying his best and have less trust in opposition parties. The voters likely also accounted for the lost COVID years.
But a significant percentage of the voters who voted for Modi in 2019 and have not voted for him now are from the bottom of the pyramid. The opposition parties’ attempts to persuade the majority of such voters to vote out Modi have not succeeded.
While religious and caste polarization may have contributed to the limited setbacks faced by the BJP (and NDA) in the elections, economic distress at the bottom of the pyramid, especially the lack of sufficient jobs and income, very likely played a more dominant role.
Had the unemployment situation been better, the BJP might have secured an even more comfortable majority than in 2019; caste polarization might not have been as damaging.
Voters are not interested in statistics and explanations from either side. They want jobs and income, as perceived through their personal experiences, and want to vote for that party they trust to help them earn a living. If they can’t find such a party or alliance, they go back to caste dynamics.
While various Modi government schemes have benefited the poor, they still experience distress. Without employment that meets their expectations and can uplift them economically and socially, more of the same good schemes that helped them so far won’t be enough to win back all of their votes.
Thus, creating an adequate number of reasonably well-paying jobs for the masses is essential for BJP and NDA to come back to power in 2029. The road to the 2029 elections also has the state elections in between.
Well-paying jobs, as perceived by TV debaters, analysts, and the middle class, often mean government jobs and formal sector employment. However, this is not necessarily the expectation of the average voter at the bottom of the pyramid (50% of voters, whose votes matter most).
Although everyone would undoubtedly prefer a government job or formal sector employment, those at the bottom of the pyramid would be content with informal sector jobs offering an income equal to the national per capita income (about Rs.2,14,000/year or Rs.17,800/month). (World Inequality Lab Report for the year 2022-23).
This figure is misleading because the per capita income of the bottom 50% of Indians is just Rs.71,163/year (less than Rs.6,000/month), with even lower figures for the bottom 25%.
Let’s not forget that these figures were even lower progressively in the previous years.
While efforts must be made to increase their income significantly, we should be realistic about what can be achieved in the near future.
Apart from government efforts to create higher-tech and middle-level jobs, the single most important initiative to create maximum jobs for those at the bottom of the pyramid is promoting informal sector jobs in manufacturing and services, including cottage industries and street vendor jobs, especially in rural areas.
The Modi government has very wisely introduced various loan schemes to help the poor start and run tiny businesses, including street vending, sometimes employing additional workers. The government also provides some training related to tech ventures, such as using drones in rural areas.
Job creation is only part of the solution. Equipping people with the necessary skills to handle these jobs is a more significant challenge.
Assuming that there is either enough opportunity to create micro-level informal sector jobs, and/ or that all the government schemes have the potential to create such jobs, most of our unemployed and under-employed people are not adequately employable.
At least very basic training should be provided to develop self-esteem in them and practical skills such as communication skills, negotiation, customer satisfaction, right pricing, managing finance, banking, and digital economy should be imparted. Although these may be high sounding, there are simple versions of these skills even in the informal sector, and they can be provided on a large scale at a low cost (which can be mostly borne by the government).
Informal sector entrepreneurs and workers need training in the basic skills mentioned above, in addition to any technical skills. Without guidance on running their enterprises successfully, many entrepreneurs may fail, resulting in lost investments, non-repayment of loans, and a loss of confidence in their ability to be micro-entrepreneurs.
With proper training and guidance, their success rates could increase significantly. Some could progress to become MSMEs, and a few could grow even larger. Every small increase in success rate will yield compounded benefits to the economy and the poor.
After all, even Dhirubhai Ambani started as a street vendor, though he didn’t need training, as he came from a business community.
Given India’s large population and vast internal market, we can cultivate crores of micro-entrepreneurs, with the right training and support. This is a low-hanging fruit with the potential for substantial political dividends.
Of course, the government should continue its initiatives to develop the formal sector and jobs in this sector. This will mainly grow the economy many-fold while developing the informal sector and jobs in this sector will mainly develop the people at the bottom of the pyramid.
The formal sector and informal sector are like our two eyes. Neither of them is more important than the other.
If the government initiates such micro-level training programs to develop entrepreneurs and workers at the bottom of the pyramid, the BJP could win another term in 2029.
Note:
1. Text in Blue points to additional data on the topic.
2. The views expressed here are those of the author and do not necessarily represent or reflect the views of PGurus.
For all the latest updates, download PGurus App.
- Why opinion/ exit polls go wrong - June 25, 2024
- How to focus on jobs at the bottom of the pyramid - June 20, 2024
- RSS: The friend, philosopher, and guide of BJP - June 17, 2024
