India's Job Crisis Laid Bare By PLI Data: Govt Investment Must Create Employment

India's CEA said PLI Schemes are yet to pick up across sectors barring pharmaceuticals & mobile phone manufacturing

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Hindi Female

The Chief Economic Adviser V Anantha Nageswaran said on Monday, that Production-linked Incentive or PLI Schemes are yet to pick up across many sectors, barring pharmaceuticals and mobile phone manufacturing.

He unveiled important data in a webinar, on how much of the investment and employment targets had been met through the scheme launched in April 2020 under Atmanirbhar Bharat. Nageswaran, to his credit, revealed the current government data, collated from DPIIT (Department for Promotion of Industry and Internal Trade) which shows speciality steel, automobiles, drones and white goods having not received any investment so far.

But there are few more points that emerge on a closer look at the figures unveiled. A lot has been laid at the door of PLIs, so to interrogate the numbers is instructive.
India's CEA said PLI Schemes are yet to pick up across sectors barring pharmaceuticals & mobile phone manufacturing

PLI data revealed by CEA online

Image: Kamran Akhtar/The Quint

Ailing Employment Numbers Across Sectors

The willingness or the lack of it, of people to invest, using the incentives provided via public or the taxpayer’s money to businesses, comes off as not a healthy barometer of the Indian economy. Consider just the two sectors being pointed out as showing robust growth—pharmaceuticals as the first, here, while the amount of investment is 107% of the target as per government figures, the employment generation is a woeful 13%.

In mobile phone manufacturing also cited as good, the details belie that. The amount of investment that has gone in, has met 38% of the target, but employment? Just 4% of the government’s own targets.

In Electronics, which should have seen better, the investment targets met are just 4.89% of the targets and a meagre 0.39% of the jobs target can be said to have been seen as done. In Speciality Steel, Automobiles and auto components, Drone and drone components and Advance Chemistry Cell (ACC) Battery sectors, zero percent of targets have been met, i.e., neither have any investments come nor any jobs created.


PLI: India’s Bid for Self-Reliance

PLI schemes have been defined by the government in April 2021, as a “cornerstone of the Government’s push for achieving an Atmanirbhar Bharat. The objective is to make domestic manufacturing globally competitive and to create global champions in manufacturing. The strategy behind schemes to offer companies incentives on incremental sales from products manufactured in India, over the base year. They have been specifically designed to boost domestic manufacturing in sunrise and strategic sectors, curb cheaper imports and reduce import bills, improve cost competitiveness of domestically manufactured goods, and enhance domestic capacity and exports.”

The scheme’s objectives, with equal hyperbole in the February 2021 budget had Rs 1.97 Lakh Crore allocated for 13 key sectors, initially, “to create national manufacturing champions and generate employment opportunities for the country’s youth.” The “minimum production in India as a result of PLI Schemes is expected to be over USD 500 billion in 5 years”, it was said.

Joblessness Is a Raging Issue Among the Country’s Youth

More schemes and sectors were added subsequently. But there seems to be a sharp dissonance between the objectives achieved so far and the results, most tellingly in India’s ability to create jobs.

India’s jobs crisis was the clear writing on the wall, when a leaderless set of revolts in the form of anger at Agnipath—undercutting options available for youngsters to seek continued and respectable employment in the Indian armed forces.

Anger against joblessness has been visible and literally, out on the streets. The Indian Railways claimed damage of upto Rs 1000 crores to railway property as protests raged from Bihar, UP, Haryana, Madhya Pradesh and Telangana after the 14 June notification which decided that there would now only be recruitment for short-term contract soldiering for four years, enraging millions who prepare for a life of respect and security in the armed forces.


Before Agnipath protests too, thousands of students, who appeared for the railway recruitment examination were out blocking railway tracks and on Republic Day too, a passenger train was set on fire with angry youngsters taking to the streets.

The protests, while said to involve technicalities of the Railway Recruitment Board's Non-Technical Popular Categories (RRB-NTPC) exam 2021, actually served to bring out the anger in a country where the median age is 29 years against limited job opportunities, shrinking of government opportunities, and the almost lack of ability of the private sector to shoulder that responsibility.

Mass Layoffs in IT Exacerbate Unemployment Trouble

In 2022, start-ups across sectors in India have laid off a total of 11,833 persons. Well-known large IT firms have delayed hirings this year. The latest government figures on the PLI schemes also failing on the jobs front are only a worrying endorsement of the severe unemployment crisis that has remained as the dull soundtrack of the ‘India story’ for over eight years now.

Centre for Monitoring Indian Economy(CMIE) data has consistently pointed to India still not being out of the woods and being unable to level with even pre-Covid job figures. CMIE’s Mahesh Vyas noted that September-October 2022 data for salaried jobs was catching up with pre-Covid jobs data after 32 weeks but it still needs to reach “90 million” to be regarded as fully recovered. The pre-Covid level of those in salaried jobs was 86.5 million and it is now between 85-86 million.


Profits Over Jobs?

The PLI schemes are being hyped as the panacea for India’s problems. But if they have been unable to help reduce unemployment which is currently India’s biggest problem and one that precedes the pandemic, then concerns that the tax payer’s money, at a time of scarce public resources, is being funnelled into it, only to up profits?

Are PLIs in India, turning out to be like the corporate tax write-offs given a couple of years ago, yielding nothing except for more money and legroom for corporates, unable to translate into yielding downstream benefits, like more jobs?

The PM feeling compelled to launch the Rozgar or jobs mela, starting recruitment for 10 lakh government jobs must be seen in the context of this anxiety, as Pakoda economics, of asking the youth to seek ‘self-employment’, is not picking up and is not catching the fancy of the young.

India has very little time to capitalise on its ‘demographic dividend’, as the total fertility rate in the country has shrunk much faster than earlier thought possible. If the present-day youth is not immediately harnessed into the economy, with a large youth demographic, it is likely to turn into a demographic nightmare very soon. The numerous instances of agitated youngsters on the streets across the country, demanding jobs is a recurrent and worrying theme of 2022.

(Seema Chishti is a writer and journalist based in Delhi. Over her decades-long career, she’s been associated with organisations like BBC and The Indian Express. She tweets @seemay. This is an opinion article and the views expressed above are the author’s own. The Quint neither endorses nor is responsible for the same.)

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