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ILO reaffirms what we all knew: Indians are crazy about govt jobs

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Millions scramble to get a govt job, pretty much any govt job, in India. Take just two examples. Recently, for ~60,000 UP police constable jobs, there were ~48 lakh applicants – that’s a selection ratio of 1.25%. For army jawans recruitment, selection ratio is 3%-4%. And ILO’s 2024 report on employment in India, as has been widely noted, clearly points to a crisis in creating jobs.
Why, 30+ years after reforms and in the world’s fastest growing major economy, is a sarkari naukri so coveted?
First, let’s get an idea of the labour market:
➤ 972 million working age people (15-64 in 2023)
➤ 586 million Indians are employed (2023 data)
➤ Organised sector (private + govt) jobs, at 152 million, are just 25% of total jobs.
➤ And in this, govt (Centre + states) jobs number 14 million. So, 2 out of every 100 jobs in India are sarkari.
➤ Only our 1.4 of 100 working age could be sarkari
This is when LFPR in India is 49.9%, or roughly half of the 972 million working age people in India. Labour force participation rate is the proportion of working-age people who are available for work. It’s clear, therefore, there are very few govt jobs. But that by itself wouldn’t create a mad rush for these jobs. That can only be explained if, one, most non-govt jobs were unattractive and, two, govt jobs offered what most private sector jobs didn’t. Both are true.
Problem with most non-govt jobs
Regular private sector jobs with monthly salaries & benefits like paid leave are scarce. Even in cities and towns, just about 50% of jobs offer regular salaries. Of these, just 47% offer jobs with paid leave. It gets worse. Working conditions are even worse in 430 million+ unorganised sector jobs. And, while govt jobs data includes unpaid household work and self-employment as employment, it stands to reason many thus employed would prefer a regular job.
Attraction of govt jobs
➤ Entry level govt salary for a low skill job is Rs 33,000 (plus benefits like HRA, DA, paid leave).
➤ Entry level private sector salary for a low skill job is around Rs 10,000, often with no benefits.
➤ Even low-skill govt jobs offer job security.
➤ Most low-skill private sector jobs don’t offer job security.
What will reduce the scramble of millions for a few govt jobs are lots of regular private sector jobs with some benefits for low, medium skill workers. But that’s not happening. Manufacturing, for example, employs just 35 million.
So, what’s the solution?
Pundits have come up with various suggestions.
1 India must specialise in light manufacturing, which is more labour-intensive, and where workers don’t need to be highly skilled. Bangladesh in textiles is a case in point. The problem here is that East Asia is well into the game.
2 Another solution, tougher to implement, is to radically improve the quality of education, with special stress on technical education, and create a highly skilled workforce fit for 21st century. The problem here is two-fold. One, it requires not just time but enormous political will. Two, most high-skilled jobs will be in capital-intensive industries, which employ fewer workers.
3 A different idea is to focus on services and not factories. Services jobs can vary from highly specialised, like medical or legal, to basic, delivery personnel. The problem is again two-fold. One, this is virgin territory. No country, at a similar stage of economic development as India is now, has solved its jobs problem via services. Two, the viability of a services-led labour force depends on middle- and top-end services being exportable on a sustained basis.
Dole for unemployed
Post-war, Western economies recognised capitalism will frequently create unemployment and skills mismatch. Answer: unemployment dole – a fixed, smallish payment for those looking for jobs or rendered jobless. India doesn’t have universal dole. If it did, non-govt jobs won’t be as unattractive. In part because low wage/poor working conditions private sector jobs won’t be able to compete with the prospect of free money. More important, losing a private sector job won’t spell disaster. Therefore, the scramble for govt jobs should become less. How will govts find the money? One way is to rework welfare financing. People with a dole (or jobs) won’t need free grain/free power/free fuel, etc.
Note: Figures have been rounded off for ease of reading; Data sources: Central, state govt data, UN, PLFS, Pay Commission, ILO; Data compilation: Atul Thakur

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