Joblessness is on the rise”India’s biggest challenge has been a slowdown in investments since 2011-12,” said Mahesh Vyas, CEO of the Centre for Monitoring the Indian Economy (CMIE). “Then, since 2016, we have suffered too many economic shocks in quick succession.”
The currency ban, GST and intermittent lockdowns all reduced employment, he added.
Unemployment climbed to a 45-year high – 6.1% – in 2017-18, according to the last official count. And it has nearly doubled since then, according to household surveys by CMIE, a widely-used proxy for labour market data.
More than 25 million people have lost their jobs since the start of 2021. And more than 75 million Indians have plunged back into poverty, including a third of India’s 100 million-strong middle class, setting back half a decade of gains, according to estimates by Pew Research.
‘Make in India’ – Mr Modi’s high-octane flagship initiative – was supposed to turn India into a global manufacturing powerhouse by cutting red tape and drawing investment for export hubs.
The goal: manufacturing would account for 25% of GDP. Seven years on, it’s share is stagnant at 15%. Worse, manufacturing jobs went down by half in the last five years, according to the Centre for Economic Data and Analysis.
Exports have been stuck at around $300bn for nearly a decade.
Under Mr Modi, India has steadily lost market share to smaller rivals such as Bangladesh, whose remarkable growth has hinged on exports, largely fuelled by the labour-intensive garments industry.
Mr Modi has also hiked tariffs and turned increasingly protectionist in recent years – in tandem with his rallying cry for “self-reliance”.
Infrastructure building is a rare bright spot
Mr Modi’s government has been laying 36km (22 miles) of highways a day on average, compared to his predecessor’s daily count of 8-11km, said Vinayak Chatterjee, co-founder of infrastructure firm Feedback Infra.
Installed renewables capacity – solar and wind – has doubled in five years. Currently at about 100 gigawatts, India is on track to achieve its 2023 target of 175 gigawatts.
Economists also largely welcomed Mr Modi’s populist signature schemes – millions of new toilets to reduce open defecation, housing loans, subsidised cooking gas and piped water for the poor.
But many of the toilets aren’t used or have no running water, and rising fuel prices have undone the benefit of the subsidy.
And the increased spending with no matching income from taxes or exports has economists worrying about India’s ballooning fiscal deficit.