Vyapam scandal is just a symptom of all that ails the job market

Madhya Pradesh scandal should be treated as a wake-up call underlining the urgent need for job creation

Fresh controversy following court revelations of at least 25 serial deaths will understandably occupy centre stage in the scandal involving pre-medical tests (P-MET) conducted by the Madhya Pradesh Vyavsayik Pareeksha Mandal (or Vyapam). But there is an important message for the ruling Bharatiya Janata Party to consider beyond the immediate scam. It concerns a key promise it made when it came to power: jobs. Reports suggesting that so many state representatives, including close associates of the state's political leadership, willingly suborned all principles to secure admission for favoured candidates are bad enough. That thousands of candidates were willing to pay premiums to find placement in state medical colleges and various low-grade positions - from food inspector to subedar sub inspector - speaks volumes for the employment situation in the state.

In that sense, Madhya Pradesh could almost be a proxy for India. The short point is that even as more Indians seek to move away from the diminishing returns of agriculture - still India's largest employer - manufacturing and services have simply not created enough jobs to meet this demand. This is partly the outcome of liberalisation that has seen employment in the public sector, shorn of its market monopolies, shrink from 19.4 million jobs in 1999 to 17.9 million in 2010. Although private sector employment grew in the same period from 8.7 million to 10.8 million, this growth has not been enough to take up the slack. What is more, these numbers account for only the organised sector; more than 90 per cent of India's labour force is in the unorganised sector without security and benefits (in Madhya Pradesh, the figure is 96 per cent). The private sector prefers to rely on this pool of unorganised sector labour on account of rigid labour laws. This well-documented structural deficiency in India's jobs market means that demand for non-farm jobs is skewed towards the shrinking government pool with its iron-clad securities - witness the thousands who apply for a single sarkari vacancy and the unofficial premiums that change hands to secure a government job. In that context, rigging professional examinations - and the practice is rampant across India - is part of the same crisis.

The other dimension of this problem in Madhya Pradesh as for most of India is the poor operating environment for the sector that does generate employment: rural non-farm industry. In Madhya Pradesh, more than half the non-farm enterprises are in the rural areas (it is 61 per cent for India as a whole) but credit and infrastructure delivery remain major impediments to the growth of this dynamic and entrepreneurial sector. The Vyapam scandal is but one sinister symptom of all these serious asymmetries in the job market. At the other end of the spectrum is the emergence of movements like Raj Thackeray's Maharashtra Navnirman Sena (MNS) with its agenda of reserving jobs for Maharashtrians that involved attacking construction workers from north India and those who appeared for the Railway Recruitment Board examination in Mumbai. For a government sharply focused on 'Make in India' and 'Digital India', Vyapam should be treated as a wake-up call underlining the urgent need for job creation.