Why high GDP growth did not fetch BJP electoral gains | India News
An economy that grew 8.2% in 2023-24, following two years of high growth, would normally have been seen as an electoral asset for an incumbent govt. Not only should a majority of people have seen a rise in living standards, but the ruling party would have made it a central campaign plank. Neither of those things happened. Reason: India is facing a jobs crisis, which sharpened the bite of rising prices.
Plenty of signs showed that the inadequacy of decent jobs was a potent issue. It shouldn’t have come as a surprise because official data showed that while GDP, or economic output, bounced back quickly after Covid, it wasn’t accompanied by commensurate growth in better quality formal jobs.
The single biggest indicator of the absence of enough job openings is the increase in the number of people classified as self-employed. In India, the high proportion of self-employed is an indicator of the weak link between GDP growth and the creation of formal jobs.
The number of self-employed people in every 100 Indians in the workforce increased between 2020 and 2021. In 2022-23, not only were 57.3% of people self-employed, but about 18.3% of them were unpaid workers in household enterprises. The number has grown at work but without pay since the pandemic, showing that a sizable number of people did not gain from the GDP growth. Not just that, almost 46 of every 100 Indians working in 2022-23 were in agriculture, a level that was higher than the year before Covid.
Plenty of signs showed that the inadequacy of decent jobs was a potent issue. It shouldn’t have come as a surprise because official data showed that while GDP, or economic output, bounced back quickly after Covid, it wasn’t accompanied by commensurate growth in better quality formal jobs.
The single biggest indicator of the absence of enough job openings is the increase in the number of people classified as self-employed. In India, the high proportion of self-employed is an indicator of the weak link between GDP growth and the creation of formal jobs.
The number of self-employed people in every 100 Indians in the workforce increased between 2020 and 2021. In 2022-23, not only were 57.3% of people self-employed, but about 18.3% of them were unpaid workers in household enterprises. The number has grown at work but without pay since the pandemic, showing that a sizable number of people did not gain from the GDP growth. Not just that, almost 46 of every 100 Indians working in 2022-23 were in agriculture, a level that was higher than the year before Covid.
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The absence of openings meant many who returned home to villages during lockdowns couldn’t return. Agriculture is the lowest-paying and most precarious sector.
A look at swathes of India where BJP lost seats, eastern UP, north Karnataka, and east Maharashtra, all poorer parts of their states, indicates that the GDP trajectory bypassed many. With stagnant incomes, the impact of inflation was aggravated even if it was not high by historical standards.
This article was originally published by a timesofindia.indiatimes.com
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