Sagging Economy and Employment

 Economy and employment are key indicators to measure the growth of any country. India being a developing country is trying to emerge with a mission to become 5 trillion GDP. India has taken various economic and employment reforms to improve the GDP, but at ground level impacts are not in favor.In this article we will discuss how unstable policies are impacting the economy and pushing the millions in poverty and unemployment.  

Currently country is passing through stagflation which means slow economic growth and relatively high unemployment. The last time stagflation happened in the United States was in the 1970s. Inflation and economic stagnation, two concurrent factors that can cause wide-ranging economic unrest, are the source of the moniker. Stagflation is a state of the economy where prices are rising, the currency is depreciating, and there is no genuine employment growth. Once it occurs, stagnation is difficult to stop since standard economic techniques have little impact.When there is stagflation, businesses may encounter labour disruption as workers demand more pay Recent so-called economic reforms resulted in such situation. To curb the corruption on 8^th November,2016 government has announced “demonetization” to eliminate the black money from the country.Just after one year in 2017 GST implementation had been announced as taxation reform to ease out the business by making the uniform tax system in country. Economic shocks due to these policies have had massive impacts on micro and small-scale industries. Situation of unorganized sector has even worse where 90% of countries population is working. In 2017-18, the unemployment rate reached a 45-year high of 6.1%. Apart from economic policies, the government has implemented a number of policies to increase employment.

 

Aatmnirbhar Bharat, National career scheme, Prime Minister Employment Generation Program, make in India are few of the employment schemes run by the government to curb the employment situation. On papers and parliamentary sessions these schemes seem to be a path breaker but on ground level there are no visible signs of improvement. Today’s youths are aspirants who want work in highly paid and secured sectors. There are several ways to measure unemployment, including the weekly status approach, the current daily status approach, and the typical status approach.These indicators make it possible to quantify the current unemployment rate in the economy, which aids in the development of corrective actions.The Usual Status Approach, Weekly Status Approach, and Current Daily Status Approach are a few of the methods used to calculate unemployment in India.

Government employment, according to conventional wisdom, are the most secureemployment. Instead of strengthening and investing in public sectors, the government is privatizing them. For many job searchers, this means looking for work in the private sector, where reasonable compensation and benefits are rarely guaranteed. Corruption in recruitments is creating the dissatisfaction and agitation in young aspirants.This high unemployment rate among college graduates has produced "widespread youth disappointment," according to the World Economic Forum, which claims it is a threat to India's economic stability - and is part of a rising job market problem in the country. The challenge of job seekers does not end here; the global epidemic is exacerbating the problem.

From late March to May 2020, the entire country was placed under lockdown in an effort to stop the spread of COVID-19. People's freedom of movement was severely restricted during the lockdown, and all but essential business and service-related activities were effectively stopped. In metropolitan regions, the unemployment rate increased in the April to June 2020 quarter, more than double theunemployment rate in the corresponding quarter the year before. The percentage of jobless people in the labour force is referred to as the unemployment rate. People who are working or jobless but looking for employment are included in the labour force. Over the coming months, the lockdown limitations were gradually loosened.In comparison to the levels observed in the quarter from April to June of 2020, the unemployment rate also decreased. The unemployment rate dropped in the 2020 October-December quarter (latest statistics available). It was, nevertheless, much higher than the jobless rate during the same quarter a year prior.

COVID-19 struck less than five years after demonetization, wreaking havoc on most areas of the economy and bringing the unemployment rate to 20% by June 2020. Since then, the general unemployment rate in India has reduced to roughly 8%, but there are still a large number of unemployed people in a country with a population of 1.4 billion people. In the COVID year 2020, the number of suicides among the unemployed surpassed 3000. In 2020, 46 million Indians fell into abject poverty, while the number and wealth of billionaires has surged, causing inequality. Population has turned back to the villages where they are forced to work under grim situation.

A corporation uses capital expenditures (CapEx) to purchase, upgrade, and maintain tangible assets including land, buildings, machinery, and other physical assets. A corporation frequently uses capex to launch new initiatives or make expenditures. Making capital investments in fixed assets might involve fixing a roof (if the roof's useful life is prolonged), buying equipment, or constructing a new factory. Companies use this kind of financial investment to broaden the scope of their activities or to add some potential economic gain. Marely planning big Capex budget will not resolve the economic and employment situation. It takes time for Capex to take effect and with steps that will have a more immediate impact, the government should focus on getting money into people's pockets. There is a lot of room for creating jobs in the urban sector, Municipal works, such as road repairs and street lighting, are carried out by urban local bodies.Families' income levels will rise and resulting in a rise in aggregate demand, this, in turn, will encourage investment.

Both government policies and pandemic has pushed the country in high inflation and unemployment. There is need to comprehend the major causes. Economic policies of the government are out of synch with social and economic realities. Slow reforms in the public sector are needed in India, along with private capital infusion in some important industries. Privatization of the public sector and technological infusion may make the private sector more efficient, but they undercut one of the social objectives of development: job creation.

Dr. Neeti Sharma