5 million people or 50 Lakh have lost their jobs since 2016.

 The demonetisation, since applied made constant news of two sides, where the government claimed the benefits caused by the demonetisation, and the opposition, which made demonetisation ' a hot topic'. Facts arrived later in form of various reports.

What is demonetisation?

Demonetisation, is the withdrawal of coin, note or precious metal from use as a legal tender. India, applied demonetisation in November 2016, and withdrew currency suddenly with the intention to curb terrorism and illegal findings to naxals as well as to curb the menace of black money. People burnt money filled in trucks and there have been various incidents.

What did demonetisation do?

In April 2019, 'The state of working India’, which is published by the Azim Premji University revealed that 5 million people or 50 Lakh have lost their jobs since 2016. 

Not, only that even un-employment rate has doubled in between 2011 to 2018 at the rate of six percent. 

These revelations also include that rural men’s working population reduced to 72 percent in January to April 2016 and that was the time before demonetisation. Same data shows about urban man, that the figure for Urban men reduced from 68 percent to 65 percent.

This is not the only report; earlier OXFAM India’s report ‘Mind the Gap 2019 – State of Employment in India’ made the observation like quality jobs and increasing wage disparity remained the key markers of inequality in the India labour market.

Is the demonetisation the only cause to lose jobs?

Partially, demonetisation shook the market, but for unemployment, there are various other factors which are involved with unemployment.

1.       Regressive Social Norms cause unemployment

According to previous report itself, regressive social norms continued to hamper women’s participation in the workforce on an average; women are paid 34% less than similarly qualified male workers for performing the same tasks.

Female participation in workplace has been declining since 1977, and continued falling to 2015-16. According to Centre for Monitoring Indian Economy (CMIE), a think tank, only women suffer when there’s an employment problem, while jobs for men increased by 0.9 million, 2.4 million women fell off the employment map in first four months of 2017. 

Markers of inequality 

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2.      Pay Gap and gender gap increases unemployment

In 2015, 92% of women and 82% of men earned a monthly wage less than 10,000 in India.

Despite the rhetoric of job creation and ensuring gender justice, ground reality is sobering.

Job generation was adversely impacted after demonetization and hit the women workforce most.

Regressive Social Norms and Jobs

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3.      Passive attitude of industries towards a specific gender caused unemployment

However, the maternity act which increased the maternity leaves for women has also caused the ‘unemployment’ among women.

Women were forced to move out the labour force to make way of men to get the few jobs that were available.

Between January and October 2016, the percentage of households where two or two or more persons were employed was 34.8% and this dropped to 31.8% post-demonetization, with women workers becoming the first causalities of job losses.

4.      Caste and Class also hamper the employment 

According to some reports caste and class also hamper the employment as these continue to play crucial roles in determining the employment for men and women, especially in stigmata vocations like sanitation, rag-picking and jobs in the leather industry.

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5.      Lesser job creation causes unemployment

World Bank, in its publication South Asia Economic Focus, Spring 2018: jobless Growth, says that over the long-term, India has been creating 7,50,000 new jobs for every 1% rise in gross domestic product (GDP); at an average of 7% growth, India should be creating at least 5.25 million jobs.

6.      The Agriculture and Job Connectivity 

According to Centre for Monitoring Indian Economy data the number of youth (15-29 years) employed in agriculture fell between 2004-5 and 2011-12. However, after 2012, as non-agricultural job growth slowed, the number of youths in agriculture increased significantly.

7.      Manufacturing - Jobs reduced before demonetisation and post demonetisation increased more

Manufacturing jobs also reduced in absolute terms, from 58.9 million in 2011-12 to 48.3 million in 2015-16.

The leaked NSSO 2017-18 data showed that while the open unemployment rate (which does not measure disguised unemployment and informal poor-quality jobs that abound in the economy) by the usual status has jumped to 6.1% in 2017 -18 that never went over 2.6% between 1977-78 and 2011-12.

8.     A huge population

India has a huge population. There is an urgent need to control and manage the population. A huge population rises and there are not that many industries which can provide the work to the population.

How to recover from the post demonetisation economic crisis?

India’s growth creates fewer jobs than before. Fixing India’s job crisis is impossible unless the government decides to increase investment in public services, education and health. Together these sectors can compensate for the bulk of the work demand in India. 

The challenge of fixing India’s job crisis is an unachievable task for any-term government. The country’s private sector has done well in battling the unemployment challenge so far, and improving the ease of doing business is step in right direction. The youth is getting more and more educated but the growth of employment is not satisfactory.  

People lost jobs because of cash crunch after demonetization. There is no correlation between GDP growth and employment rate.

If India wants to absorb large number of labour force, it should be more focused to increase in expenditure to create more opportunities. 

There is a need to execute well planned schemes and a huge infrastructure has to be created. Economy cannot run on single engine that is on public sector alone, so private sectors should come forward. Agriculture sector have to sustain the growth of poor people.

Education system needs to be re-oriented towards vocational and practical teachings. Huge chunk of women participation in workforce is needed.

Government should give chance to youth in government jobs like judges, teachers, doctors etc. there is a need to generate more jobs in public sector. 

There should be cluster development to support job creation in micro, small and medium enterprises. 

The growth of population should be checked in order to solve unemployment problem. Family planning programme should be implemented widely and effectively. The link between good urbanization and jobs growth is positive, and unless India’s urbanization is concentrated in narrower areas and serviced by good infrastructure, job creation will be sub-optimal.

Indian government has failed to fix India’s job crisis, high unemployment and slow employment growth have been a historical reality of the country’s labour market. India’s jobless growth since the 1990s only made it worse. 

More than half of India’s population depends on the agriculture sector for work.

The report calls for a shift in development focus towards labour-intensive sectors to create more jobs and pushes for better work conditions to make jobs more inclusive. The report calls for substantially higher investments in health and education to improve productivity.