3 years of Modi govt.: PM has failed to create jobs for the desperate youth

Three years ago, Narendra Modi was sworn in as prime minister of the Republic of India amid much hope and tremendous expectation. A good portion of the population remains optimistic that he’ll fulfill his promises to unshackle the Indian economy.

But Modi’s tenure cannot yet be judged a success for one central reason: He’s signally failed to create jobs for the desperate young people who gave him his massive mandate.

Modi’s landslide victory in 2014 was bigger than any seen in India for three decades. Voters, especially in India’s poor and under-employed north, thrilled to his personality and pledges of economic and political revival.

Three years in, some important steps forward have been taken, including the passage of a landmark reform of indirect taxes. Foreign investors remain bullish on the country.

India needs to create as many as a million new jobs every month just to keep up with the growing population. Under Modi, just over 10,000 jobs a month are being created instead, according to government figures from 2015. The scale of this failure is enormous especially since it will add to the angry army of already underemployed young Indians.

The government needs to reform itself starting with creating a less-intrusive regulatory state and a more accountable tax bureaucracy. In particular, factor markets like those for land and labor need to be swiftly made more flexible nationwide, so that business becomes more competitive.

The government would argue that this is where most Indians are currently employed. But that isn’t where new jobs need to be created. While India’s informal economy has shown robust growth for decades, it’s simply not growing at the speed needed to create a China-like transformation. That needs a more formal economy.

Perhaps the focus on small entrepreneurs, together with a renewed commitment to welfarism, will be enough for Modi to survive 2019. But India’s prime minister once seemed like the country’s only hope for transformative growth. It looks like he’s abandoned that quest and India’s future looks much bleaker than it did in 2014.