Professor Santosh Mehrotra stands as a luminary in economics and development studies, celebrated for his groundbreaking contributions to labour economics, human development, and public policy. Over a career spanning four decades, he has provided invaluable counsel to national and international organizations, including the United Nations, tackling critical challenges such as unemployment, unskilled labour, and escalating poverty with unparalleled expertise.
A former Professor of Economics at Jawaharlal Nehru University (JNU), New Delhi, and Chair of the Centre for Informal Sector and Labour Studies, Prof. Mehrotra has profoundly influenced India’s strategies for inclusive growth. His extensive body of work, including widely acclaimed books and policy papers, bridges rigorous academic research with practical solutions. His insights focus on fostering human capital and strengthening economic resilience, offering a roadmap for sustainable development. As a thought leader in global economic discourse, Prof. Mehrotra’s perspectives continue to shape the narrative on addressing socio-economic inequalities.
In an exclusive dialogue with The Interview World, Professor Mehrotra delves into the pressing challenges of unemployment. He shares his forward-looking views on the employment landscape over the next decade, critiques the inadequacy of budgetary mechanisms in addressing unemployment, and emphasizes the urgent need for transformative policy reforms. Here are the key highlights from this insightful conversation.
Q: How significant is the challenge of unemployment, and what are its broader implications for society and the economy?
A: What began as a manageable issue, unemployment has spiralled into an alarming crisis of unprecedented magnitude. Despite its growing severity, we continue to neglect it, dismissing the urgency it demands. This apathy pushes us closer to a tipping point, where the problem will evolve into irreversible damage. Ignoring the warning signs will only exacerbate the situation, transforming it into a full-scale catastrophe. Immediate action is also critical to prevent this escalating crisis from reaching devastating and uncontrollable proportions.
Q: What evidence or factors support your assertion that the consequences of unemployment could be catastrophic?
A: I base my analysis on concrete numbers. First, the data reveals a stark rise in the number of people seeking work but unable to find it. Second, real wages have stagnated. After years of consistent growth from 2003 to 2015, they have remained flat since then. Meanwhile, inflation, particularly food inflation, has surged—especially vegetable prices, which have consistently exceeded 10% over the past three years.
In this context, the most vulnerable, the bottom 50% of the population, are resorting to gold loans to cope with escalating prices and rising unemployment. Tragically, many are unable to repay these loans, leading them to forfeit the gold they once held as collateral. This is not just a financial issue; it’s a crisis.
As consumption stagnates, the investment crisis deepens. Without investment, growth stagnates. And without growth, new jobs will not materialize. This vicious cycle is a growing problem, yet the government fails to recognize it. Instead, it remains focused on serving the interests of corporate conglomerates, ignoring the pressing needs of the broader population.
Q: Considering India’s current demographic dividend, which is expected to shift in the next one and a half decades, how do you foresee the employment landscape evolving during that period?
A: If this government fails to act, the situation will only continue to deteriorate. Unemployment among the youth has led to a 33% rise in suicides—a stark reality backed by hard data. Over the past five years, this crisis has escalated, and the youth will not remain passive. They will take to the streets. The electoral results already reflect this discontent, evidenced by the reduction of seats to 240. This shift reveals their awareness that they must resort to manipulation to retain power. In states like Haryana and Maharashtra, and during the Lok Sabha elections, they resorted to mass cheating.
In fact, they fraudulently secured 69 seats. Without these illicit gains, their seat count would have dropped to 161, not 240. The Association for Democratic Rights, through meticulous research, has exposed these fraudulent tactics. Cheating occurs at every stage—before elections, during voting, and post-election. With the CIA’s complicity and the widespread capture of institutions, their ability to rig the system has been reinforced. This, tragically, is the only reason they remain in power. There is no genuine hope for their continued rule.
Q: What solutions do you propose to address this issue, and what specific measures or initiatives do you anticipate in the forthcoming budget to tackle it effectively?
A: I don’t expect much from this budget, as no budget truly resolves any fundamental issues. There’s a peculiar fixation in India that views the budget as a major policy tool, but this is a misconception. The reality is, the budget isn’t a powerful policy instrument. Policies and actions should be implemented throughout the year, not confined to a single event. What we will likely witness is superficial adjustments—tinkering at the edges—accompanied by a few headlines. That’s the extent of it. In essence, the budget is, in many ways, a largely irrelevant event. Nowhere else in the world is the budget given such undue importance—only in India does it hold this inflated significance.
Q: What specific policy changes do you believe are necessary to address this issue effectively?
A: This country urgently needs an industrial policy, as relying solely on highly skilled jobs in the IT and BPO sectors is unsustainable. We must create employment opportunities for the vast majority in the non-farm sector. To do this, we need substantial investment in both rural and urban housing. Such investments would not only address the housing deficit but also generate a significant number of construction jobs. The central government must allocate funds to empower state governments to resume their investments.
Currently, central investments focus predominantly on capital-intensive projects, like those handled by NHAI, which primarily build bridges and highways using expensive methods. In contrast, state-level public investments tend to support more labour-intensive infrastructure projects. State governments should also prioritize urban housing, particularly low-cost options, as the need for affordable housing is urgent. Additionally, we must refocus on manufacturing, especially MSME-driven, cluster-based development. These areas are critical for long-term economic growth, and while I would have elaborated further on them, time did not permit.
Q: What strategies or initiatives would you recommend to enhance the employment landscape?
A: Let me be clear: we need to refocus on MSMEs, but the government will not take action. They should have been providing robust support, particularly through credit and financing, yet this has not materialized. In fact, over the past eight years, MSMEs have experienced job losses, and the number of units has declined—a trend that NSS data clearly reflects. If you read my work, you’ll find these issues are thoroughly analysed. The solutions are laid out in my published work as well. Frankly, in a two-minute interview, we could resolve many of India’s economic challenges.
