January 29, 2022

Unemployment protests in India highlight soaring inequality

topic:	Economic Opportunity
located:	India
editor:	Tish Sanghera

As the country celebrated the Republic Day holiday on 26 January, groups of angry students in India’s eastern state of Bihar set fire to empty train carriages. They were protesting perceived irregularities in the recently concluded entrance exam for the government-run railway sector, claiming the exams were conducted unfairly.

Indian Railways is one of the world’s largest employers, with more than 1.2 million people on its payroll. Like other government-sector jobs, a job at the railways is a highly sought after ticket due to its relatively high pay and formal contracts. Millions of people in the state of Bihar and neighbouring Uttar Pradesh, two of the most impoverished and highly populated states in India, had applied for the 150,000 available jobs. This type of ratio is not uncommon. The stability and above-average pay of government jobs often attracts high numbers of over-qualified applicants. In 2018, for instance, 50,000 graduates and 3,700 PhD holders applied for 62 jobs as messengers. 

Securing a government job is not unlike winning a lottery, or at least a route out of the worst levels of poverty. As India’s economy has underperformed in recent years, their appeal has only increased. Indeed, India is failing to create enough jobs for the world’s second largest youth population and a dearth in high quality jobs, in particular, means that the most educated are actually the worst off. Inequality has also soared: India's 142 billionaires are now worth more than the poorest 555 million Indians.

Though the last two pandemic years were an unavoidable drag on growth, analysts say the economy was mismanaged for multiple years preceding COVID-19’s arrival. In 2017, for instance, the Modi-led government enacted ‘demonetisation’, cancelling 87 percent of notes in circulation overnight in a bid to eradicate black money. However, studies show the move failed in its objective, instead wiping 1 percent off the country’s GDP and hurting the poorest of society. 

Coupled with a lack of policy action to tackle growing joblessness, unemployment levels have now reached a three decade high at 7 percent. However, neither PM Modi in Delhi nor his party’s leaders in state governments appear to be doing much to fix the issue. It was revealed this week that the government’s job-guarantee scheme, MGNREGA, one of the only lifelines for India’s poor, is severely underfunded. 

Indeed, though the BJP came to power in 2014 promising jobs galore, its priority has instead been to promulgate Hindutva - the core ideology of its parent organisation, the RSS. A key feature of the government’s tenure in the last eight years has been to inflame ethnic tensions, which critics say will only continue as a distraction to economic decline. 

Globally, masses of angry, under-employed young men are a threat to society. Research shows a clear link between unemployment and domestic terrorism. In a month filled with fears of growing hindu-nationalist extremism and inter-religious violence, it is not unreasonable to see India’s unemployment problem as a potential national security issue. 

Photo by Rupinder Singh

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