Economy is directly related to providing employment opportunities. Does growing economy with fast pace of development provide as many employment opportunities as people imagine or politicians tell them? Today we will discuss that in what proportion the employment opportunity is generated with expansion and development of the economy mainly in Indian context.
We will try to understand complete scenario after India's independence because in true sense the ups and downs in our economy can be assessed only after independence. India has adopted mixed economy since independence. In this form of economy, foreign investors were restricted except in certain sectors. Even private investment was available in only few areas. The government made its own investment and structured public industries which could meet the needs of India and bring the economy back on track. Public undertaking has done excellent work in many fields and has become a source of permanent employment. All these public enterprises gradually became the backbone of the Indian economy. However, it can be a matter of debate about the role of Public Sectors which is being considered as burden of the Government.
Later on, Foreign investment was opened in India when this country was struggling with the lack of foreign currency and due to which to meet domestic demand for Crude and essential items, Indian gold reserves had to be mortgaged. One of the reasons for keeping foreign investors away India's long slavery and fear of getting foreign domination. The true expansion of the economy in India began in 1991 when Finance Minister Dr. Manmohan Singh and the then Prime Minister PV Narsimha Rao opened the Indian market to foreign investors. The advantage of this was the increase of Foreign Currency Reserve and creation of new jobs in many sectors. If we see from the year 1991 onwards, the economy continued to develop gradually and new employment opportunities were created. Per capita income increased and there was a lot of improvement in the purchasing power /spending power.
We have to note that due to this reform made a very substantial positive change in Indian Middle Class and Lower Middle Class. Continuation to this, government schemes like NREGA also contributed a lot which proved a boon to daily wage worker and improved their economic position. It can be very well underlined that demand from lower income group from villages & sub urban areas rose significantly and gave pace to economic growth.
But now one of the biggest questions is that when the government is making so much effort, yet new employment opportunities are not visible, and the level of unemployment is also increasing continuously. If we discuss the contemporary situation, then we have to pay attention to some points, which can be the main reasons for this situation .
Firstly, since Corona, almost all the countries of the world have faced economic problems. The closure of businesses due to the lockdown and loss of employment in the unorganized sector posed a new challenge to the economy, which was already facing and trying to come out of Demonetization in India.
Secondly, the war between Russia and Ukraine created logistic problems that affected demand and supply to a great extent. Delay in movement of cargo/commodities adversely impacted manufacturing and trading sectors. High price rise in international freight was also a major factor all around the world.
Thirdly, All pending vacancies in Government sector which directly employs a huge number of manpower are still vacant. There is almost new nil vacancies. The government should keep in mind that government employees are a huge percentage that generate demand in the economy. It would be advisable that Government of India on a very pro-active way should induce people on vacant posts and try to generate new job opportunities apart from private companies.
Fourthly, There is a misconception that boosting and assisting big private companies will create more job opportunities and improve economic growth by creating demand in market. The main reason behind this is the use of automation and robotics by private industries, promoting unmanned production to reduce input costs which is not creating jobs as it should have been. It is simply accruing their net worth. This challenge will become more serious in the coming days.
Fifthly, the government should encourage very small and medium industries, which the government is currently doing through Mudra loans. But the effect of its implementation is not visible. It should be studied in totality and the government should take feedback of every Mudra loan taker and decide how effectively they have used this loan. This will give further roadmap to the government which will help the government schemes in working the unemployment rate.
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