As India’s economy grew, the buzz of factories turned the sleepy, dusty village of Manesar into a booming industrial hub, churning out everything from cars and toilets to smartphones and tablets. But jobs have been in short supply over the years, leading more and more workers to line up along the highway to work, desperate for money.
Every day, Sugna, a young woman in her early 20s who goes by her given name, comes with her husband and two children to the city’s labor chowk, a four-way junction bazaar where hundreds of workers gather They gather every day at dawn to beg for work. Days have passed since she or her husband went to work and she only has five rupees (six cents) in her hand.
Scenes like this are a daily reality for millions of Indians, the most visible signs of economic distress in a country where appalling unemployment is worsening insecurity and inequality between rich and poor. It is perhaps Prime Minister Narendra Modi’s biggest challenge as the country celebrates 75 years of independence from British rule on Monday.
“We get work only once or twice a week,” said Sugna, who says he earned just 2,000 rupees ($25) in the past five months. “What am I to do with such a life? If I live like this, how will my children live better?
Entire families leave their homes in India’s vast rural interior to camp in such bazaars, which are found in almost every city. Of the many who gathered in Manesar recently, only a lucky few got work for the day: digging roads, laying bricks and sweeping up garbage for meager pay. Around 80 per cent of Indian workers work in informal jobs, including many who are self-employed.
India’s phenomenal transformation from an impoverished nation in 1947 to an emerging global powerhouse whose $3 trillion economy is the third largest in Asia has made it a major exporter of things like software and vaccines. Millions have escaped poverty into a growing aspiring middle class as its highly skilled sectors have exploded.
“It’s extraordinary: a poor country like India was not expected to be successful in such sectors,” said Nimish Adhia, an economics professor at Manhattanville College.
This year, the economy is forecast to expand at an annual rate of 7.4 percent, according to the International Monetary Fund, making it one of the fastest growing in the world.
But even as India’s economy grows, so does unemployment. The unemployment rate has remained between 7 and 8 percent in recent months. Only 40 per cent of working-age Indians are employed, down from 46 per cent five years ago, says the Center for Monitoring the Indian Economy (CMIE).
“If you look at a poor person in 1947 and a poor person now, they are much more privileged today. However, if you look at it between the haves and the have-nots, that gap has grown,” said Gayathri Vasudevan, president of LabourNet, a social enterprise.
“While India continues to grow well, that growth is not creating enough jobs; more importantly, it is not creating enough good quality jobs,” said Mahesh Vyas, CEO of CMIE. Only 20 per cent of jobs in India are in the formal sector, with regular wages and security, while most of the rest are precarious and low-quality, with few or no benefits.
That’s partly because agriculture remains the mainstay, with about 40 percent of workers engaged in farming.
As workers lost their jobs in cities during the pandemic, many returned to farms, driving up the numbers. “This didn’t necessarily improve productivity, but you’re employed as a farmer. It is unemployment in disguise,” Vyas said.
With independence from Britain in 1947, the country’s leaders faced a formidable task: GDP was just 3 percent of the world’s total, literacy rates were 14 percent, and average life expectancy was 32. years, Adhia said.
According to the most recent measures, literacy stands at 74 percent and life expectancy at 70 years. Spectacular progress occurred with landmark reforms in the 1990s that ended decades of socialist control over the economy and spurred remarkable growth.
The past few decades have inspired comparisons with China as foreign investment poured in, exports boomed and new industries such as information technology were born. But India, a latecomer to offshoring Western multinationals, is struggling to create massive employment through manufacturing. And it faces new challenges to chart a path forward.
Financing has tended to flow into profitable, capital-intensive sectors such as gasoline, metals, and chemicals. Industries that employ large numbers of workers, such as textiles and leather goods, have faltered. This trend continued during the pandemic: despite Modi’s 2014 launch of “Make in India” to turn the country into another manufacturing plant for the world, manufacturing now employs around 30 million. In 2017 it employed 50 million, according to CMIE data.
As factory and private sector jobs shrink, young jobseekers are increasingly seeking government jobs, coveted for their security, prestige and benefits.
Some, like 21-year-old Sahil Rajput, see such work as a way out of poverty. Rajput has been earnestly preparing for a job in the army, working a low-paid data entry job so he can receive private training to become a soldier and support his unemployed parents.
But in June, the government overhauled military recruitment to cut costs and streamline, swapping long-term posts for four-year contracts, after which only 25 percent of recruits will be retained. That move sparked weeks of protests, with youths setting vehicles on fire.
Rajput knows that he may not be able to get a permanent job in the army. “But I have no other options,” he said. “How can I dream of a future when my present is in tatters?”
The government is betting on technology, a rare bright spot, to create new jobs and opportunities. Two decades ago, India became an outsourcing powerhouse as companies and call centers flourished. An explosion of start-ups and digital innovation aims to recreate that success.
“India is now home to 75,000 new businesses in the 75th year of independence and this is just the beginning,” Commerce Minister Piyush Goyal recently tweeted. More than 740,000 jobs have been created through startups, an increase of 110 percent in the past six years, the ministry said of him.
There is still a long way to go, in the education and training of a workforce qualified for such work. Another concern is the steady decline of working women in India, from a high of nearly 27% in 2005 to just over 20% in 2021, according to World Bank data.
Meanwhile, the stopgap of agriculture looks increasingly precarious as climate change brings extreme temperatures and scorching crops.
Sajan Arora, a 28-year-old farmer in India’s barn state of Punjab, can no longer rely on the ancestral farmland his family has relied on for survival. He, his wife and his seven-month-old daughter plan to join his family in Britain and find work there after selling land.
“Farming has no way out,” Arora said, saying he will do whatever job he can get, whether it’s driving a taxi, working in a store or on a construction site.
She is sad to leave her parents and childhood home behind, but believes the uncertainty of change offers “better prospects” than her current reality.
“If everything was fine and correct, why would we go? If we want a better life, we will have to leave,” she said.