India’s Missing Jobs

It was the Wall Street Journal yesterday. Today, it is The New York Times:

India’s economy is spawning a growing middle class, a host of world-class companies, a booming stock market and a new image for this nation of more than one billion people.

But those very reforms and conditions are also reducing the prospects of some of its citizens. India may be “shining,” in the description of a controversial and expensive government publicity campaign, but it is also struggling to generate jobs.

This southern state [of Andhra Pradesh] and its chief minister, N. Chandrababu Naidu, capture the challenge facing India as a whole. The lack of work here is bad among educated urbanites, and worse in rural areas, where two-thirds of the work force lives and depends on nature’s bounty. Severe drought – and a lack of irrigation and power to ease it – have prompted migration and farmers’ suicides, and helped sustain a tenacious left-wing insurgency that nearly succeeded in killing Mr. Naidu last October.

Over time, predicts S. P. Gupta, a member of India’s planning commission who specializes in employment, the social consequences of jobless growth will become more severe, whether in mass migration, or in riots like those that broke out last fall when 600,000 people applied for fewer than 3,000 low-level railway jobs.

In part, Mr. Naidu’s blandishments reflect the dynamics of the global rush to India. As more cities, from Bangalore to Chennai (formerly Madras), compete for information technology companies, the companies have the leverage.

But it is not clear how much his state is getting in return when it comes to jobs. While nearly 60,000 jobs in information technology have been created here, many have gone to young Indians from across the country, despite this state’s 350,000 English-speaking graduates.

Since taking office, Mr. Naidu has increased the number of engineering colleges from 32 to around 230, and the number of graduates from 8,000 each year to 75,000. By the end of 2002, the state had around 2.6 million educated unemployed residents.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.