Challenges of Productive Employment Creation in India

I have new article on the institutional governance issues faced by employment sector in India. 

"The COVID-19 pandemic has paved a holistic structure for the implementation of a set of policies and programmes through the States with the help of technologies for reporting systems for all infected persons, tracking them, etc. At the end of the day, some status reports are put out for the public and it helps everybody from global monitoring agencies to the local public to be informed about the status of diseases spread. 

We need a similar or better-improved model through technology-driven governance structure for transparent decision making along with accountability for every other sector, especially the public healthcare system, modernisation of primary health centres, district hospitals, insurance policies of governments, etc. 

Similarly, we need to reinvent the entire social sectors such as the education and skill training sector as well as the labour and employment sector with a more robust mechanism to fulfill the aspirations of youth and educated graduates for finding livelihoods and employment opportunities, and to make their dreams come true in a more blended way. Are our top policymakers paying attention to the ground realities and the dismal situation of the employment sector? Only time will!" 

Skills vs Jobs

Mr Manish Sabharwal has been writing more than a decade now urging the governments to reform the Indian labour market systems, but its going to be long firefighting before achieving the desire goal.

"after reviewing decades of evidence, Nehru would acknowledge that the nutty economics of the 1955 Congress Avadi resolution and slogans posing as policy like Garibi Hatao kept many Indians in employed poverty.

The 67 per cent-plus turnout in our recent election not only reflect the invisible threads that hold India together but capture an aspiration that breaks with India’s economic past. This dua needs policy to pray to the one god of formal jobs."

Skills for managing State welfare in India

More than what employers wanted from job seekers, it is the job seeker who have to self assess what he can do or cannot do with his right kind of skills identified with confidence.

Some good reading

Understanding Arvind Kejriwal

How they killed our factories

Mandela: Reckless But Lucky

"the generic tea seller is secular and the typical tea shop is a nodal point for discussion and argument conducted in the secular spirit, with an inclusive political awareness."

"UP pays teachers more than ten times the state’s per capita GDP."

Patel, the father and about his son and daughter

A stupid's last-mile attempt to ridicule his faithfully believed position held nearly a decade  

Abolishing taxes

Stupidly unfair

Manish has a great piece in today's IE on minimum wage in India. He argues very perceptively that the "The trade union demand is a predictable positioning of narrow self-interest as national interest but the government's acceptance of their demand is unfair, delusional and economically stupid."

Kirana shops or jobs

"Why do tragedies at the individual level translate into massive gains at the national level? Because if our overall aim is to have higher incomes for everybody, that entails more capital per person and newer technology per person."

Midnight’s children or reform babies

Manish has a very genuine assessment about the lively impact of foreign direct investment in retail sector in India. Most people who take interest in FDI in retail debate misses the below points which are extremely important at this juncture in Indian economy.

•  We know that kirana (unorganised retail) shop owners are a much smaller population than exploited kirana workers. We know that unorganised retail is the biggest user of child labour. We know the tragic costs of informal employment (no PF, no ESI, no appointment letters and no minimum wages). We know that 100% of net job growth since 1991 has been in informal jobs; the slavery of the 21st century. We know that kids don’t view employment as a lifetime contract (mai-baap) but a taxicab relationship that is intense, intimate and short. We know that 10 lakh kids will be joining the labour force every month for the next 20 years. We also know that a sales job is the most blue-collar white-collar job. The notion that agricultural jobs or manufacturing jobs pay more, provide higher job satisfaction or offer better physical environments is not a myth; it is a lie. I am not sure where the romanticism of shop floor or fields comes from but our economy is driven by domestic consumption—strength as the global crisis enters its sixth year—and that means sales and customer service will be the biggest job creator in the next two decades. So, there is nothing horrible about “India becoming a nation of sales boys and girls”. This will be a less poor India.

Interesting reading

Manish on rightly asks why there is no narrative for youth in India in the contemporary political setups. The following para is really suburb:

• The garibi hatao card does not work because voters are jaded by the lack of execution of promises since that slogan was coined 40 years ago. The free electricity card does not work because it leads to no power, which infuriates the people further. The reservation card does not work because we have reached the limits of confiscating capacity in hiring, education and promotions. The big state that is financed with deficits is discredited because the economic mayhem of the past few years shows that there is no magical “multiplier effect”, and deficit financing leads to inflation with no boost in output. The freebies card is less effective because it has to be given to everybody, since fixing the plumbing to target its distribution is so difficult to achieve. The majboori card is less potent because of prosperity; it is much harder to get people to migrate to big cities than it should be. The foreign enemy card does not work because Pakistan is imploding and we are hardly surrounded, like Israel is. The mystique of the incumbent does not work because the 24-hour news cycle encourages breathless breaking news over reflection. The “young blood” card does not work because the only pathways in politics are geriatric. The corruption card does not work because, um, if everybody lives in glass houses, everybody needs to answer the bell. 

"India can learn from Brazil’s Bolsa Familia and China’s Gansu Programme to make refinements to its MGNREGA scheme."

Professor Indiresan on "There is a proverb in Kannada language, ootathannicche; nota pararicche(meals according to personal taste; dress according to the taste of others). On that basis, the present day youth are trying to please their own kind even if it is against the wishes of their elders"

Pokenomics and others

ET started to poke you and me on the irrelevant of political power doom in India. Here is one on why should we have president or for that matter governors in India.

For the Indian Father of the ‘God Particle,’ a Long Journey from Dhaka

The argument of compliant about cheep labour is only half truth in the dump piece of NREGA scheme.

With only 1.97 per cent of Indians reading English-language papers such as this (according to Media Watch), we are saddled with a much more grotesque imbalance. The first headmaster of Britain’s elite Atlantic College told me he had two Indian students but didn’t need more since one was called Gandhi and the other Nehru. That was many years ago and it was a joke even then. There can be no animal spirits to revive confidence in governance today unless the millions who must trudge under those flyover pipes are assured they won’t be soaked.

Squandered political capital

Interesting readings:

1. Why I am quitting my job for earning wages under NREGA?
2. Schooled into brands and brands into schooled
3. Is it a reversion to command economy? Is it that you are reasserting the need for a socialist economy?
4. Economist Lant Pritchett calls India a flailing state
5. Ladies and gentlemen, it is time to place your bets
6. Wizards economics

Blind spot is the real hurdle

From Saving India from the Keynesians by Shanmuganathan "Shan" Nagasundaram

• "While there would be impediments to implementation as cited above, the bigger stumbling block lies in the realization by the economic team as to why the above is the right thing to do. For a team that has paraded the NREGA as its flagship achievement, indulges in price controls as a way to manage inflation, has praised ministers for presenting socialistic budgets (for example, the railway budget, where passenger fares have not been revised for the last eight years and due to the burgeoning deficit, there has been a nominal increase in 2012), the intellectual blind spot is the real hurdle. With the repeated hyperbole in the mainstream media of Indian Prime Minister Dr. Manmohan Singh being a "brilliant economist," and given that he has surrounded himself with advisers who are essentially welfare/Keynesian economists, salvation truly lies only within."

Growth mania

Mostly today's Indian newspapers are talking about growth vs poverty.


While Indian Express expressed "Any public debate on poverty tends to blend reason and emotion." The ET says that economic growth helps in reducing poverty but interventionist scheme like NREGA is an important tool for that makes limited sense.


Prof Panagariya has a piece in ET which argues that Rajiv Gandhi had no political game of fame of his own in winning elections. All he used was the political game developed by his mother and grandfather.


Budgeted failure: The left people never try to see other side of the same coin as far as the freeing of gold import is  concerned. Here is poor professor who argues for more restriction of gold import.


Liberal economist Dr Ashok V. Desai says: "The finance minister has chosen to tax gold. This in my view is stupid; gold is so easy to smuggle that taxing it will collect no revenue and revive gold smuggling." 


Other readings


In India, History Literally Rots Away
India will be superpower 
Writing on the wall

Yet, half change in DSE

Dear Readers,

I thank you all for visiting this blog! For some reasons I have been out of touch for long time now. Finally I assure you that henceforth I will be in touch with you all regularly.

Here goes the first installment!

It is not that easy or common to hear from the professors at Delhi School of Economics arguing in favour of directly financing for something or other thing in India. But here is an exceptional! 

Prof Rohini says "The budget speech reflects seriousness on the problems of governance and waste within the public sector. Completing the Aadhaar project will allow all transfers to go through a reliable and common database. Experiments such as pricing domestic LPG at market prices and giving subsidies directly to consumers seems a useful step in controlling leakages and eliminating black markets." 

But I still wounder why these same professors are not getting the similar logic and reasoning in respect of directly funding the students/trainees in schools and training institutions in India?

In the view of misguided scheme like MGNREGA, it took years to realize the fact this scheme has alone caused the raise of labour cost in the manufacturing in India.

Here is a quick reflection on the Budget, Rural Development Ministers saying about NREGA and the realistic assessment of the damages done by NREGA.

Blinking links

Dr.Surjit Bhalla on says perhaps rightly so "I think a liberal society, which I hope and want India to be, has absolutely no place for reservations of any kind." and "And reservations is not the right policy to enhance the well-being of the poor. Maybe after the noise has settled, Parliament will sponsor the creation of a new Constitution, one based on the principles of rights and justice, and not on the ad hoc principles of state intervention."


Shekhar Gupta explains Mera Neta -dalit, tribal, OBC, upper caste-Chor Hai

Dr. Shubhashis, Research Director,India development Foundation writes something interesting about Indian social science researchers dealing with data:

•  the other issue that was brought up was the difficulty of obtaining Indian data. Any researcher reading this will, I am sure, be able to recall many instances of this. In my own experience, I can think of at least two instances that stand out in my memory: (a) in one I could not get the type of access that a foreign researcher could; and (b) in the other, I got access from the foreign researcher at a time when the government organisation in charge of the data was refusing me access to it! In fact, what has helped research is the Right to Information Act and I know of many academics who have obtained data through this Act.

NREGA is money down the drain.

Blinking links

• Manish Sabharwal writes "...the most articulate non-economic case for urbanisation was made by Nandan Nilekani in his book Imagining India: “It has been fashionable in our cultural commentary to refer to India’s cities as places of vice, corruption and loss of innocence. But cities are, and have historically been, a powerful catalyst for political reform. Leaders such as B.R. Ambedkar recognised this and found the Indian city liberating after the sink of localism and den of inequity that was the village. Upward mobility for the backward castes is therefore most tangible in our cities because it becomes difficult to enforce silly notions of caste purity and pollution in the forced proximity of our city buses and trains.”

• Niranjan reviews a new book Grant Pursuit..."The Industrial Revolution had shown glimpses of a better future, though there was little historical reason to believe that societies could escape the poverty trap. Karl Marx and Friedrich Engelspredicted that capitalism would inevitably push workers into penury and the entire economic system would collapse in a heap. Engels comes across better than Marx in Nasar’s book. Marx, it seems, wrote about the horrors of industrial life without even once seeing the inside of a factory. He lived in London not too far away from two outstanding thinkers: Charles Darwin and George Eliot. He never bothered to either meet or correspond with them."

NG-means nuked gundas

Senior BJP leader says:

Ravish Tiwari: Your NDA government is held responsible by some for converting the Public Distribution System from universal to a targeted one. What is your stand on NREGA and schemes like targeted PDS?

I was the chairman of the Public Accounts Committee in this Parliament for a while and I examined NREGA. I found that NREGA is not a success story, it is a disaster story. It is simply a hand-out and not always to the deserving. A great deal of this money goes to the village sarpanch. NREGA is a criminal wastage of money.

Lose your job and beg at my feat!

Learn how to destroy the jobs created by people themselves through Central Government schemes like NREGA which is fully funded by tax payer’s money.

"This government is nothing but a useless loudspeaker"

“Using the NSSO employment statistics along with the Census of India population projections, it comes about that between 2004-05 and 2009-10, only 2 million jobs were added—compared with 55 million who joined the workforce aged between 15-59 years. The same calculation shows that between 1999-2000 and 2004-05, the economy generated 62 million jobs.”

From UPA’s legacy: jobless growth by Anil Padmanabhan

Chinese Confucius via India’s confusion Conferred by government fiats

From a article by Mr.Shreekant Sambrani on fishing the NREGA:

• The great Chinese sage Confucius said that he gave a hungry man a piece of fish which took care of his hunger for a day. Teaching him how to fish would have taken care of his hunger for life. Poverty alleviation has two dimensions: its manifestation and its causation. Relief activities, feeding programmes and curative medicine address the manifest symptoms of poverty. They are akin to giving the Confucian hungry man a piece of fish. Augmenting assets to enhance their productivity, education and skills training to improve employability on a sustained basis, and preventive medicine together with added nutrition to increase vitality, all attack the factors that cause poverty in the first place and attempt to break the poverty trap. They teach the man how to fish and, hopefully, provide him a fishing tackle. 

• A Keynesian perpetual employment model of digging ditches and filling them up (or its modern Indian equivalent of rebuilding kutcha roads washed away after the monsoon year after year) may provide relief indefinitely, but does not address the root cause of the problem. Rural connectivity accounted for 40% of the NREGS activities until 2009. Having to undertake drought relief year after every drought year means that there is no drought-proofing worth the name. 

• NREGS is as yet in the nature of an entitlement. Conferred by government fiats, it could create dependencies and sycophantism. Power gained through economic means, be it higher income from productive activities or greater control over local developmental expenditure, is far more lasting and elevating. The ultimate test of effectiveness of NREGS is that it is no longer needed. That would be a true tribute to the valiant fire-fighter Mr Kanga 40 years on. 

• You see those hills?” Jamshed Kanga, an illustrious IAS officer, then divisional commissioner, Pune, asked the noted development economist John Lewis who was visiting him in 1972, pointing to the barren Sahyadri range behind his office. “I will break every one of those if necessary, but will not let a single person starve.” It was the worst drought in the history of independent India, with a monsoon deficit of 25% from the normal. Maharashtra and Gujarat were the worst sufferers. Kanga was true to his word. Massive relief works, mostly of the nature he had indicated, warded off starvation.

The CCT mania

• This doesn’t mean CCTs are a bad idea. Far from it, and several countries, including developing ones in Asia and Latin America, have successfully experimented with CCTs. Especially in education, there are also experiments with education vouchers in more than one state. However, what is the Nandan Nilekani task force going to examine? Is it a cash transfer or is it a voucher? From the nomenclature of the task force, we are talking about a cash transfer. But let’s think of a voucher first. A voucher offers choice, competition and efficiency. However, exercise of vouchers requires existence of choice on the supply-side. One can’t use food stamps if there is only one PDS shop within a radius of 10 km. Yes, supply-side responses occur, but they don’t occur instantly. 

• Moving on to cash transfers, if they are conditional, they are de facto not that different from vouchers and there will be universal resistance (on several counts) if we move on to unconditional cash transfers. On CCTs, shouldn’t we learn from what is now acknowledged to be a mistake, making NREGA payments mandatory through banks and post office accounts? That required a level of financial inclusion we don’t have. If we wish to successfully introduce CCTs, those pilots should be in so-called elitist and urban areas, where delivery is less of a problem. 

(From Bibek’s article on Saving a good idea)

The original notification of Task Force for Direct Transfer of Subsidies on Kerosene, LPG and Fertiliser to Individuals/Families Constituted is here.

Make that loot work is the welfare fanatics!!!

Surjit Bhalla on Scams in the name of poor: 

• But the scams pertaining to the national welfare schemes like MGNREGA and PDS, may annually be about the size of the 2G scam, if not more. I repeat—the flow of corruption money via operation of MGNREGA, PDS, fertiliser subsidy, kerosene subsidy, etc, may well be substantially in excess of Rs 40,000 crore a year, and well in excess of 1% of GDP each year. This conclusion is not new — the late PM Rajiv Gandhi reached the same conclusion in 1985 when he claimed that only 15% of the money meant for the poor reached the poor. 

Also read Loot For Work Programme by Jean Dreze, (Jul 1, 2005, ToI)