Jobs and outcomes

A potentially powerful feature of the Congress party’s manifesto with respect to jobs is its proposal to expand employment through expansion of health and education services. It “pledges to create lakhs of jobs for qualified teachers, doctors, nurses, paramedics, technicians, instructors and administrators through a massive expansion of the education and health sectors.”

There is no doubt that there is great need to increase the quantity and quality of education and health services in India at all levels. We need to spread such services to a very large section of the population that is still under-served.

Unlike manufacturing industries, these services cannot be provided solely by machines. Automation is no threat to humans in these fields. Machines can be used by human beings to deliver these services better, but the need for human beings is very high.

If hundreds of thousands of additional professionals can be harnessed to provide these services, we would do a great service to the nation while also providing jobs to the technically qualified.

India lacks in health and medical services so severely that we can easily raise the demand for professionals in these areas significantly. If implemented well, it can possibly remove or at least reduce the bias in favour of engineering and MBA education by raising the demand for health and education professionals.

Hopefully, the Congress manifesto’s suggestion implies that the government will directly employ these professionals by expanding these services itself. This will ensure quality jobs.

However, the ultimate objective here should be to provide services, and not just jobs. Mixing the objective with the means can be disastrous. The outcomes should be measured in terms of the spread of the services and the quality of the services delivered. It would be appalling if jobs are provided but services are not delivered correspondingly.

The manifesto suggests an increase in funding to support para-state workers in health service and an increase in the number of ASHA workers. 

The Congress party’s most direct suggestion on the jobs front is to fill all of the four lakh vacancies in the central government and central government enterprises by March 2020. It would also work towards getting 20 lakh vacancies in health and education sectors in state governments filled in.

Governments mostly fall short in providing services and so it does make sense to fill in vacant posts. So, this is a direct assault on unemployment. However, it is worth pausing and wondering that if government services were not hurt because some posts were vacant then there may be no good reason to fill them. If the posts are indeed filled then we must expect better services from the government. The objective is, again, to provide services and not just provide jobs that do not provide services.

The Congress party has suggested some economic liberalisation measures to help improve the jobs situation in India. This includes lowering of the effective direct tax rates and lowering of contributions to corporate social responsibility funds by select job-creating sectors. Lowering of tax rates for the creation of jobs seems to be a good idea.

I find three problems in the Congress party’s suggestions on jobs. First, it pledges to give the highest priority to protecting existing jobs and creating new ones. It is not a good idea to protect all existing jobs because many of them need to perish and be replaced with new ones. Second, it proposes to create a ministry of industry, services and employment because, it says, there is a link between the growth of these industries and jobs. The problem here is that often there is an inverse link. Some industries need to shed jobs to grow and others need to invest more in capital than in labour to grow. These conflicts cannot be resolved within a single ministry. Particularly because we already have a ministry of labour and there could be no case to merge this with the new proposed ministry. Third, it is not a good idea to impose apprenticeship on companies as suggested by the Congress manifesto.

The Congress manifesto has made 18 specific suggestions on the jobs front. The BJP manifesto released on Monday has made no specific suggestion on jobs.

It is good that none of the parties is promising millions of jobs. Hopefully, they will not make such promises during their rallies. Jobs alone are not important. It is what the jobs deliver in terms of goods and services and in terms of a good quality of life for the provider of labour that is important.

The author is the MD & CEO of CMIE