Rising unemployment: can India afford to ignore the robots' onslaught?
Fact - India is the fastest growing economy in the world.
Fact - India is a bright spot among world economies, according to the International Monetary Fund.
Fact - The unemployment rate in India has shot up to a five-year high of 5%.
All the above mentioned facts have been reported extensively through the course of 2016. The fastest growing economy in the world is the favourite destination for global investors, and yet, the economy is not able to generate jobs for its own populace.
Clear and present danger
A World Bank research has predicted that 69% of Indian jobs are threatened by automation. In China, the risk is even higher, at 77%.
Everyday, thousands of people face the threat of losing their jobs to robots or artificial intelligence. The banking sector, which, for many years, has provided clerical jobs to a large population in the country, is now moving towards automation, which does away with the need for a majority of the staff who presently run banking operations.
Recently, the Times of India reported that ICICI Bank has become the first in the country and among the first few in the world to deploy software robotics to take over repetitive tasks. The bank has already automated 200 business process functions, and plans to increase this to 500 soon.
The manufacturing sector has already made a big leap in the use of robots, which can perform most tasks without the help of human beings.
How can India deal with the situation?
The threat of machines is not particular to the Indian economy. People across the world are losing jobs to robots, who can work more efficiently at a fraction of the cost.
But what makes robots or automation more threatening for an economy like India is its demography. There is no country in the world where one million people enter the workforce every month. And this will continue to happen till 2030 at least.
Instead of creating more jobs, if the automation process starts killing even those that exist today, the world's youngest country, which, till a few years ago, was thinking of reaping demographic dividends, will enter an era of social unrest.
No government can afford to close its eyes to this problem. But, can any government stop the rise of machines in the labour markets?
Unfortunately, this is not possible. However, the Government of India must take up the issue seriously and set up a special task force to look into the possible solutions for the rising unemployment in the country.
Lessons from the West
The economists in the Western world have started talking about a universal minimum wage. This will provide a guaranteed amount of money to unemployed people, who would still be able to participate in economic activities, contributing to the growth of their economies. A minimum wage will also stave off the possibility of social unrest in society.
However, in a country like India, where the tax-to-GDP ratio is just 17%, the government cannot even think of providing minimum wages to its workforce.
Time is running out for the government. There is a need to look beyond the GDP numbers to find a solution to the monster of jobless growth. A deliberate ignorance of the increasing force of jobless people may come at a high cost to a nation dreaming of being a superpower.
Edited by Shreyas Sharma
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