On May 26, 2016, Narendra Modi’s government crossed the three-year mark as prime minister of the Indian Republic.
In the course of a five-year term, we are well past the halfway point and in India — where there is constant campaigning with local, regional and national elections — it is time to take stock, albeit provisionally.
The Bharatiya Janata Party (BJP), the Hindu Conservative Party, had swept the last general elections in 2014 on the wave of the collective enthusiasm for Modi, the candidate of the Hindu far right and a symbol of a successful transformation in the Indian political landscape.
Modi was a sectarian leader known across the country — and beyond — for the atrocious anti-Muslim pogroms that occurred when he was governor of Gujarat State. Between 1,000 to 2,000 were killed in a matter of a few days. But from there, Modi positioned himself in the national elections as a standard-bearer of progress, the strong man who would push the economy mired in growth rates close to 5 percent.
The electoral campaign, conducted around the keywords “vikas” (progress) for all and “acche din” (good days) around the corner, yielded unexpected fruit by granting Modi a historic victory and an overwhelming majority in the Lok Sabha, the lower house of Indian Parliament. This set the conditions for the beginning of a season of reforms advocated by voters, by Indians observers and by the markets.
They all agreed to give the coalition government a chance. It had blatantly moved to the right, but, according to the promises, it was ready to feed a new “Indian Dream.”
Even though GDP growth put New Delhi ahead of the rest of the emerging economies this year, with growth forecast at around 7 percent for 2017 (World Bank data) and foreign direct investment in 2016 of $46.6 billion (still far from China, which attracted three times as much), several observers have pointed out that the huge unemployment problem has remained largely untouched, if not worsened, by the current administration.
Before presenting the numbers, a small preliminary explanation is needed. The Indian job market is divided into two major categories: the formal sector, which includes everyone under contract categories that provide rights like vacation time, pension, health insurance, paid sickness leave and fixed wages (mostly public employees, white collar jobs in the public and private sectors); and the informal sector, where there is no contractual protection, no fixed working hours, no rights and no welfare.
In 2016, according to data by the Indian Labor Bureau, in the eight categories that make up the formal sector — from health, education and hospitality to the traditional categories of manufacturing, construction, trade, transport, and Information Technology and Business Process Outsourcing — only 231,000 new jobs were added. Compare that with the exponential increase in population; according to estimates, 15 million young Indians enter the labor market each year.
Clearly there are no data on the informal sector, but when taking into account that the formal sector employs, according to the government’s estimates, around 10 percent of the total workforce, the result is that nine out of 10 workers in India do not have a steady job.
These are the so-called “self employed,” day laborers employed in manual work with minimal skill requirements and minimal wages.
According to the latest government labor report available (September 2016) it is estimated that more than 87 percent of Indian households, including urban and rural, earn less than 20,000 rupees per month (€276); almost half of the total barely make 7,500 rupees per month (just over €100).
These are alarming figures that come after years of rhetoric on growth and “progress for all,” fueling the dreams of a generation of Indians who have been promised an imminent entry into the middle class and who now risk a thunderous collision with a bitter reality. This was described by the BJP president, Amit Shah, in a recent speech: “In a country of 1.2 billion people, not everyone can get a job in the formal sector. So, we decided to promote the swarojgar (self-employment).”
Just over three years ago, in a similar rally, Modi promised 10 million jobs a year. Things did not go as hoped.