India’s Paradox: Vacant Posts and Joblessness
The political challenge is also an economic imperative. The proposition of Arthur Okun where growth rises with employment demands that the government evolves an ecosystem which propels job creation.
By Shankkar Aiyar |Published: 09th January 2022 06:55 AM |
India is at an intersection where the political challenge is also an economic imperative. The consequences of poor employment growth scarcely remain under the radar — they tend to surface in politics as disaffection and in the economy as lower than potential growth. What is aggravating the circumstance is a peculiar paradox — of vacant posts and joblessness.
The fundamental force of economic growth was best outlined by economist Arthur Okun in the 1960s. Okun demonstrated that when unemployment falls, the production of a country will increase and had proposed that a rise in unemployment leads to a fall in real domestic output. This column has observed in the past that while demography — essentially an increase in the number of workforce — is a driver of economic growth, it does not necessarily deliver desired destiny without policies to enable job growth.
Last fortnight saw a familiar saga play out in Madhya Pradesh. The government had invited applications for 15 posts of peon, gardener, driver and sweeper in the Gwalior district court. Over 11,000 people applied for the available positions. The required qualification for the posts — Class 8 pass and Class 10 pass to be a driver. Those who applied were graduates and post graduates, some of whom were also studying to qualify for vacancies for civil judge in the same court.
The rush for a government job is not unique to Madhya Pradesh. Not long back over 90,000 hopefuls had applied for the posts of 62 peons in Uttar Pradesh. Over 3,500 of the applicants had doctorates and others held post graduate degrees whereas the basic qualification required was Class 5. In Maharashtra, 2.5 lakh applicants registered for MPSC exams for 290 posts — one applicant who cleared the prelims ended his life awaiting the interview.
Of course, the pandemic has made matters worse but the economy’s struggle to create jobs predates it. Even as thousands struggle to find employment, central and state governments have consistently persisted with a policy of allowing posts at various levels in the government to lie vacant.
The number of vacancies in government posts which are updated regularly in Parliament merit attention. Consider the vacancies in the central government. In July 2021, the government informed Parliament that over 8.72 lakh posts were vacant across various levels in the central government — of these, over 2.79 lakh posts were vacant in just one department which is the railways.
How are the state governments doing? Not any better would be the short answer. The bitter irony of the situation is that while graduates and post graduates are applying for jobs of peons, posts in schools and universities lie vacant. The data is shocking. There are over 10 lakh government schools — mostly funded and run by state governments. The sanctioned strength for teachers is 61.84 lakh. Of these, one in six or over 10.6 lakh posts are vacant — over 2.75 lakh in Bihar, 2.17 lakh in UP and over 91,000 in MP.
Consider the capacity in ensuring law and order. One of five police posts in the country is lying vacant. The sanctioned strength of police personnel across all states is 26.23 lakh whereas the actual strength is 20.91 lakh leaving over 5.32 lakh posts vacant. On the rostrum of poor performers are Uttar Pradesh with 1.11 lakh vacancies, West Bengal with 55,000 vacant posts and Bihar with over 47,000 unfilled positions.
The pandemic, particularly the second wave, has highlighted the inadequacies of public-funded health care in rural areas. As India gears up to face the Omicron wave, a moot question is how well-staffed the healthcare system is across states.
In December 2021, the government cited rural health statistics to inform Parliament that over 47,000 critical posts — of which over 24,000 are for doctors and specialists — along with over 10,000 posts of support staff are lying vacant at primary health centres in rural India. As I have chronicled in my book ‘The Gated Republic’, the failure to invest in critical sectors of education, health and security has consequences for the larger political economy.
It has been argued that the state governments are constrained by their revenue models and lack the funds to employ people and fill the vacancies. It is equally true that the budgets of the state governments do not quite reflect the hierarchy of priorities and prudence. It is useful to note that no economy has arrived into the developed club without spending on human infrastructure and that includes China.
The essential formula of growth is C+G+I+NX — Consumption plus Government spending plus Investment plus Net Exports. Consumption can grow only on the back of new and rising incomes. Yes, the government has subscribed to the received wisdom that it must lead in investing for growth — and that the private sector, constrained by expectations of profit, will follow.
The premise that one results in the other, that the former will lead to the latter requires a reset of legislative and regulatory conditions. As research by Aventis Regtech shows, entrepreneurs are haunted by over 1,500 laws and over 69,000 compliances to follow.
The foundational proposition of Okun where growth rises with employment demands that government create an ecosystem which propels job creation.
Shankkar Aiyar, political economy analyst, is author of ‘The Gated Republic –India’s Public Policy Failures and Private Solutions’, ‘Aadhaar: A Biometric History of India’s 12-Digit Revolution’; and ‘Accidental India’. You can email him at email@example.com and follow him on Twitter @ShankkarAiyar. His previous columns can be found here. This column was first published here.