Identities matter. But an obsession with the past makes it much harder for the country to grapple with the profound changes taking place both within and outside.
As the hubbub of the elections fades, the prosaic realities of governance loom. Sadly, the renewed emphasis on identity politics by the main parties during the election campaign meant that once again there was little attention on the difficult policy choices facing the country. The Prime Minister spent much of his energies vilifying minorities. What happened to sabka saath, sabka vikaas? Meanwhile, the Congress belatedly discovered the virtues of a caste census. Naturally, now that Bihar has done one, the state will soon be blessed with social justice and prosperity.
Identities matter and have unequivocally adversely shaped the lives of those unlucky to have drawn the short stick in the lottery of life. But an obsession with the past makes it much harder for the country to grapple with the profound changes taking place both within and outside. The heat waves amidst the elections were a grim foretaste of what the future portends. The water crisis in Bengaluru highlighted just how badly states have handled urbanisation, which should be propelling growth and social change. Meanwhile, all parties were shedding crocodile tears for farmers, knowing full well that for the vast majority of India’s marginal farmers — the two-thirds of cultivators with less than a hectare of land — prosperity is less likely than a glacier in the Thar desert.
Perhaps, the single biggest economic and social challenge facing the country is the lack of decent employment. For much of the period since Independence, the problem was disguised as severe underemployment, in both agriculture and informal sectors. Agriculture can no longer be the sponge for both demand and supply reasons. As levels of education increase and aspirations change, fewer young people want to work in agriculture. It’s not just about incomes but also its perceived low status in marriage markets.
More than a century ago, Ambedkar had argued that “strange though it may seem, industrialisation of India is the soundest remedy for the agricultural problems of India”. But other than singing hosannas to him, there was little in the campaign on how this might be achieved.
The competitive pressures on more welfare for votes was in sharp contrast to the virtual absence of attempts to grapple with the core question on how to build competitive advantage to attract the investments needed to create jobs. Some countries (like Germany) have tried to build a workforce with strong technical skills. Others (like Singapore) have built their competitive advantage on the “ease of doing business”. China has done so by building excellent infrastructure. The US and Switzerland have built theirs on strong national innovation systems. What about India?
Many of the basic elements of “ease of doing business” — whether corruption, contract enforcement or the predictability and certainty in government policies and regulations — continue to be fraught. Key factors of production, whether electricity or land, are relatively expensive. Land acquisition and clear property rights continue to be problematic. Innovation is stymied because the most powerful Indian private sector firms have little incentive to do so. Comparing the patents filed by Reliance and Adani to a South Korean company of equal size is embarrassing — although apparently not for the two Indian heavyweights. The Global Capability Centres (GCCs) of MNCs are doing much more innovation in India than most Indian firms because they have to compete globally. So, it can be done in India by Indians. But not apparently by Indian firms.
What about India’s most abundant factor — labour? For many decades, India failed to school them. When it started to do so, it handicapped them with limited skills because the schooling system does not prioritise learning outcomes. The most severe structural labour market challenge has been the lack of job options for those who complete high school. At India’s level of development, most jobs — whether in factories, malls or in the gig economy — do not require a college degree. Indeed, they require even less the sorts of college degrees that confer few skills while incurring high opportunity costs of time and money. Yet, the mantra of all governments is to revel in just how much India’s Gross Enrollment Ratio (GER) in higher education has been increasing even though the country’s GER has been much higher than others at comparable levels of development. Its quality is apparent in the number of desperate parents, who cannot afford to educate their children in Western countries, sending them to study in places ranging from Ukraine, Kyrgyzstan and Philippines. States clamour for more central higher education institutions even as they neglect their own. The central government, meanwhile, puts ideological affinity over academic competence in staffing these institutions.
Nonetheless, given the sheer scale of the system, it still manages to produce large numbers of self-motivated young people. But the allocation of this talent is skewed. The leading technical institutions prefer to publicise their graduates’ salaries rather than how many are going into research or industry. Little wonder that the number of Indian students doing PhDs in the United States has stagnated even as the number of Indian students in that country has ballooned.
While public policy in India has created a wide range of market distortions, nowhere has that been as extreme as in labour markets (other than agriculture). This is not just with regard to regulatory strictures on firms. It’s even more apparent in hiring by the government itself. There is no bigger lie that politicians peddle than the promise that more government jobs along with higher reservations will somehow solve the employment problem while simultaneously improving social justice. Certainly, it will do so for the handful lucky enough to get the few government jobs. But the likelihood that anyone will get a government job is at best a couple of percent points relative to the size of the labour market. The overall number of jobs in government has stagnated or declined over the past three decades, both at the Centre and across states, squeezed by technological changes, fiscal pressures, competition (in the case of state-owned enterprises) and the sheer obstacles in filling vacancies, from leaked papers to judicial stay orders.
The result is millions of young people spending some of the best years of their lives in rote learning to clear exams where very few will be successful. So much risk-taking in order to get a risk-free job. For the unsuccessful millions, it’s not just the opportunity cost of the lost years or the money spent in coaching classes but also that all this effort does little to equip them with skills that could be helpful in other endeavours.
The political class has played a masterful con that coveted government jobs await India’s young people. But then, in many ways, India has always done a con job on its young. Poor nutrition and sanitation bestowed on babies and children that impair their cognitive and physical development; indifferent and uninspiring schooling; and a college education where the disgruntled teach to the disheartened. Of course, there are exceptions. Given India’s size, that’s a substantial number. But the median baby, the median child, and the median college student have already been handicapped even before they enter the labour market. And the median job aspirer has virtually no chance of getting a government job. She could, of course, get solace by going to the Ram temple or filling out the caste census form. Maybe we do know that ultimately that’s all we can offer her.