Economist Kaushik Basu worried over poor jobs data in India

Kaushik Basu, the former chief economic adviser to the government of India, has raised concerns on the state of India's jobs market and has also called for improving education standards, where we have slipped in rankings. 

"Jobs data is very poor in India. Part of it is legitimate reason that so much of work is so different from what you get in the west that the definitions of west with which you are collecting (data), Indian answers will not fit into these and we are not good at collecting jobs data. But from all the piecemeal evidence coming in, the bottom segment of the population is struggling. The jobs sector is doing badly in manufacturing, agriculture and informal sector is actually floundering in India," said Basu.  

The government's demonetisation move, which hurt India's economic growth, was a move "uncalled for" and had also affected employment in India, added Basu, who was also the chief economist at the World Bank between 2012-2016.

He has called for change in the nature of education in India, if the jobs scene is also to improve. 

"India, which was such a leader in terms of early engineering, early universities, IIMs, is sinking in terms of global ranking of education," feels Basu, who says while India is beginning to improve in terms of primary education, and in higher education, where we were earlier doing a lot of cutting edge work, a lot more needed to be done.

"We can't live in the belief that we did everything 5,000 years ago. The trouble with that is, either that's false or if its true, we should be embarrassed that if we had done everything 5,000 years ago, losing it we should be ashamed of ourselves," he said. 

The issue of good education and jobs becomes more critical given the advent of automation technologies and artificial intelligence. While some jobs are expected to go, people will have to be accommodated in more creative and different kinds of work, which computers will not be able to do, said Basu. 

"Human enterprise and labour will have to do innovative, creative work, which is not going to be taken away by machines. By innovative, I just don't mean science and patenting, even painting... What we think of creative original work—poetry, writing—this will remain our domain. There's also research," said Basu in his talk organised by JSW Foundation.

He also feels that inequality is growing a lot in work places, in wages and has called for some form of profit-sharing with workers.

"You need some form of profit-share. This has to be done carefully; a certain percentage of a nation's profit and rental income, if it is kept for the masses... You don't want to take away the profit motive from the industrial enterprise, that's very important. But, a certain amount of sharing is important. Inequality is going up staggeringly and this is happening a bit across the world," noted Basu.  

In recent months, a surge in crude oil prices and a depreciating rupee has hurt India's economy pressuring the current account deficit. As the US dollar has appreciated against a basket of currencies, India's rupee has hit record lows. Basu, however, feels the rupee is overvalued. 

"Our exchange rates have tended to appreciate over the last couple of years, because India is inflating faster than the industrialised countries and barring the correction that has taken place in the last few months, the rupee has been appreciating. My own hunch is the right kind of level is Rs 71 to the dollar," said Basu. 

On Monday, the rupee had slipped 28 paise to close at 68.88 against the greenback. It had hit an all-time low of 69.12 against the dollar on July 19. 

The noted economist who was the chief economic adviser to the Indian government from 2009-2012, is also worried over the current socio-political climate, the recent incidents of lynchings and has called for a collective responsibility to avoid these things, which hurt India's image.  

"The socio-political side does trouble. This is the time of the news that you get, is hurting India's global image, the lynchings, the narrow mindedness, we have to work collectively and the elite across the board, not just corporate elite, even political elite, have a responsibility that this is a country that invested heavily in some of these qualities," said Basu. 

"Whether India did right in investing so early in democracy and free speech, one doesn't know. I think, it was right. One thing is certain. Having done it, to lose that is like building harbours, roads, railways, investing in something and then not using it. It will be unfortunate and I hope people have collective wisdom not to damage these qualities."