PM Modi's 'Hiring Spree': Plan to Combat Unemployment or Preparation for 2024?

Functional case for PM's mission ‘fill-in 10 lakh vacancies’ is quite weak. Its fulfilment is also in serious doubt.

Functional case for the mission ‘fill-in 10 lakh vacancies’ is quite weak. Its fulfilment is also in serious doubt.

(Photo: Arnica Kala/The Quint)

Prime Minister Narendra Modi wants his government to go on a hiring spree for giving youth of India 'a ray of hope'. But before getting excited, let's crunch some numbers.

Statement 22 in Budget—Expenditure Profile—provides numbers about strength of civilian employees of the central government, which includes personnel of central armed police forces (CAPFs) like CRPF and civilian staff of the Defence Ministry. Servicemen employed in armed forces are not counted in.

Total civilian staff strength of central government for year 2022 is stated at 34.65 lakh. The staff strength in 2020 and 2021 was 31.80 lakh and 34.53 lakh respectively. Expansion in 2021 was largely in taxation departments.

• Prime Minister Narendra Modi wants his government to go on a hiring spree.

• Where are the vacancies? Will the government succeed in this massive recruitment exercise?

• Annual Reports of Railways and Post Departments don’t talk about vacancies.

• What the government really needs is a business processing reengineering exercise (BPR).

• Functional case for the mission ‘fill-in 10 lakh vacancies’ is quite weak. Its fulfilment is also in serious doubt.

Prime Minister's Announcement Changes Budget Calculations

Budget 2022 expected only a marginal increase of 11,827 employees during the year. This, however, is set to change dramatically. On 14 June, Prime Minister Narendra Modi directed the central ministries and departments to hire 10 lakh new employees over next 18 months.

Central government staff strength was 35.98 lakh in 2015. Since then, there has not been any structural change like spinning off a department in as a public sector corporation affecting total staff strength.

There has been a net reduction in central government employee strength by 1.33 lakh in last eight years. Reversing this trend, the new plan aims at hiring 10 lakhs. That is about 1/3rd of the total central staff strength.

It seems, Modi government will unleash a hiring genie.

Where are the vacancies? Will the government succeed in this massive recruitment exercise?

Is this a governance gamechanger or a political ploy?

Where Are the Vacancies?

Government did not provide details of where the 10 lakh vacancies are. No information is readily available in public about it either. We have to make inferences.

Three Departments of Indian government together employ 27.66 lakh staff, which make up about 80% of total central government staff strength in 2022.

Here is the breakup:

• Railways 12.02 lakh

• Home (largely CAPFs) 11.43 lakh , and

• Post 4.22 lakh

Rest 85 odd departments account for the remaining 7 lakh employees.

Railways and Posts have been downsizing for over three decades now. Annual Report 2020 of Railways inform that their employee strength has come down from 16.52 lakh in 1990-91 to 12.54 lakh in 2019-20. Strength of Department of Post which employed 5.92 lakh people (including 2.99 lakh extra departmental employees later converted into Gramin Dak Sevaks) in 1990-91, has come down to 4.22 lakh.

Annual Reports of both these Departments don’t talk about vacancies. These two departments have effectively abolished about 6 lakh posts over last three decades. Is the Government treating these posts as vacancies?

Will Modi Government Hire People for Obsolete Posts?

There has been steady increase in the strength of CAPFs since 2000, which doubled up from 5.88 lakh in year 2000 to 11.47 lakh by 2015. Thereafter, there has not been any net additions. Is the Government planning to go for massive increase in the strength of CAPFs?

Rest of Government is made up of largely clerks, accountants, stenos and Class-IV (now called MTS). In the digitalisation age, most of these posts have become redundant. Accordingly, their vacancies—probably exceeding 2 lakhs—have not been filled in for last many years. Does the Government intend to hire people for these obsolete positions?

Government should clear the air about vacancies. In the absence of clarity, it is likely to lead to frustration among potential applicants.

Government Needs Business Processing Reengineering

What the government really needs is a business processing reengineering exercise (BPR).

Since government is in the business of delivering public goods and services, it needs to hire qualified employees to perform these jobs. Additionally, it also provides many commercial services—Railways and Posts being the primary examples. Both these organisations are in no position to compete with the private sector and are a big burden on the State finances.

If there is a professional BPR for these two organisations, many more jobs will be found to have become redundant. Instead of filling the ‘vacancies’ in these departments, the government should shed many more. Likewise, recruitment of MTS, clerks, stenos and accountants are completely unnecessary.

There are several areas where the State needs to do more—justice delivery, environment and pollution clean-up, skilling of labour, expansion of health and education services, back-stop unemployment insurance, and the like. A thorough BPR exercise will throw up how many jobs need to be created in these spheres.

There are, however, no ready vacancies to fill in there.

Has the Government Thought of Expenditure Implications?

Will this mission blow up government expenditure? Yes, it will.

Fiscal impact of this ‘fill-up 10 lakh vacancies’ mission will depend on how many vacancies the government is able to fill-up in next 18 months, which coincides with the window before the next Lok Sabha elections.

Present government has recruited less than a lakh person a year on an average. It decided in to bring-in National Recruitment Agency (NRA) to conduct online Common Eligibility Test (CET) before its recruiters Staff Selection Commission, Railway Recruitment Boards etc make the final candidate selection. NRA is still to come into existence and figure out its testing protocols.

There is every likelihood that the recruitment agencies will prove a big bottleneck. It will be quite a challenge to fill-in even 20% ‘vacancies’.

Central Government’s establishment expenditure—primarily salaries and pensions—is budgeted at nearly Rs 7 lakh crore in 2022-23.

As per Statement 22, Government will spend Rs 4.22 lakh crore on ‘pay’, ‘allowance’ and ‘travel’ in 2022-23. For 34.65 lakh employees, it costs public exchequer Rs 12.2 lakh per employee.

Therefore, if the central government succeeds in recruiting 10 lakh employees, annual establishment bill will likely go up by Rs 1.22 lakh crore a year.

Is the Announcement More of a Political Ploy?

Government spends in excess of Rs 1.3 lakh crore on pensions. New employees covered under NPS, are not entitled to pension from Government. Some states like Rajasthan and Chhattisgarh have started irresponsibly winding-up the NPS. There is a risk that central government also catches this virus and become populist. If that happens, pension liabilities will also blow up.

Functional case for the mission ‘fill-in 10 lakh vacancies’ is quite weak. Its fulfilment is also in serious doubt. However, this will clearly generate a big buzz in crores of unemployed youth.

With an eye on 2024 poll, perhaps that is the real intent.

(Subhash Chandra Garg is Chief Policy Advisor, SUBHANJALI, author of The $10 Trillion Dream, and Former Finance and Economic Affairs Secretary, Government of India. This is an opinion article and the views expressed are the author's own. The Quint neither endorses nor is responsible for them.)