NEW DELHI (AP) — As India’s economy grew, the buzz of factories transformed the sleepy, dusty village of Manesar into a booming industrial hub, churning out everything from cars and sinks to smartphones and tablets. But jobs have become scarce over the years, prompting more and more workers to queue along the road for work, desperate to earn money.

Every day, Sugna, a young woman in her twenties who goes by her first name, comes with her husband and two children to the town’s plowing chowk – a bazaar at the junction of four roads where hundreds of laborers gather every day at dawn to plead for work. It has been days since she or her husband found a job and she only has five rupees (six cents) on hand.

Scenes like this are a daily reality for millions of Indians, the most visible signs of economic distress in a country where raging unemployment is deepening insecurity and inequality between rich and poor. This is perhaps Prime Minister Narendra Modi’s biggest challenge as the country celebrates 75 years of independence from British rule on August 15.

“We only have work once or twice a week,” said Sugna, who says he has earned just 2,000 rupees ($25) in the past five months. “What am I to do with a life like this? If I live like this, how will my children live better?

Entire families leave their homes in the vast rural hinterlands of India to camp in these bazaars, which can be found in almost every city. Of the many people gathered in Manesar recently, only a lucky few got work for the day – digging roads, laying bricks and sweeping rubbish for meager pay – around 80% of Indian workers toil in informal jobs, many of them are self-employed.

India’s phenomenal transformation from an impoverished nation in 1947 to an emerging global power whose $3 trillion economy is the third largest in Asia has turned it into a major exporter of things like software and vaccines. Millions of people have escaped poverty to join a growing and ambitious middle class as its high-skilled sectors have boomed.

“It’s extraordinary – you wouldn’t expect a poor country like India to be successful in such sectors,” said Nimish Adhia, professor of economics at Manhattanville College.

This year, the economy is expected to grow at an annual rate of 7.4%, according to the International Monetary Fund, making it one of the fastest growing in the world.

But even as India’s economy swells, so does unemployment. The unemployment rate has remained at 7% to 8% in recent months. Only 40% of working-age Indians are employed, down from 46% five years ago, according to the Center for Monitoring Indian Economy (CMIE).

“If you look at a poor person in 1947 and a poor person now, they are much more privileged today. However, if you look at it between the haves and the have-nots, that chasm has widened,” said Gayathri Vasudevan, president of LabourNet, a social enterprise.

“While India continues to grow well, this growth is not generating enough jobs – more importantly, it is not creating enough good quality jobs,” said Mahesh Vyas, chief executive of CMIE. Only 20% of jobs in India are in the formal sector, with regular wages and security, while most of the rest are precarious and of poor quality with little or no benefits.

This is partly because agriculture remains the mainstay, with around 40% of workers engaged in agriculture.

As workers lost their jobs in cities during the pandemic, many returned to farms, pushing the numbers up. “It hasn’t necessarily improved productivity, but you work as a farmer. It’s disguised unemployment,” Vyas said.

With independence from Britain in 1947, the country’s rulers faced a formidable task: GDP was only 3% of the world total, literacy rate was 14% and average life expectancy was 32, Adhia said.

According to the most recent measures, literacy stands at 74% and life expectancy at 70 years. Dramatic progress came with historic reforms in the 1990s that swept away decades of socialist control over the economy and spurred remarkable growth.

The past few decades have inspired comparisons to China as foreign investment poured in, exports flourished and new industries – like information technology – were born. But India, which arrived late in the relocation of Western multinationals, is struggling to create mass jobs thanks to the manufacturing industry. And it faces new challenges to chart the way forward.

Funding has tended to flow to profitable capital-intensive sectors such as oil, metals and chemicals. Industries employing large numbers of workers, such as textiles and leatherworking, faltered. This trend has continued throughout the pandemic: despite Modi’s “Make in India” speech in 2014 to turn the country into another factory for the world, manufacturing now employs around 30 million people. In 2017, it employed 50 million people, according to CMIE data.

As factory and private sector employment declines, young job seekers are increasingly targeting government jobs, coveted for their security, prestige and perks.

Some, like 21-year-old Sahil Rajput, see this work as a way out of poverty. Rajput prepared fervently for a job in the military, working a low-paying data entry job to afford private coaching to become a soldier and support his unemployed parents.

But in June the government overhauled military recruitment to cut costs and modernize, turning long-term assignments into four-year contracts, after which only 25% of recruits will be retained. The move sparked weeks of protests, with youths torching vehicles.

Rajput knows he may not be able to get a permanent job in the army. “But I have no other options,” he said. “How can I dream of a future when my present is in tatters?”

The government is banking on technology, a rare ray of hope, to create new jobs and opportunities. Two decades ago, India emerged as an outsourcing powerhouse as businesses and call centers boomed. An explosion of start-ups and digital innovation aims to recreate this success – “India is now home to 75,000 start-ups in the 75th year of independence and this is just the beginning,” the Minister of Finance tweeted recently. Trade, Piyush Goyal. More than 740,000 jobs have been created through start-ups, a 110% jump over the past six years, his ministry said.

There is still a long way to go to educate and train a skilled workforce for such work. Another concern is the steady decline of working women in India – from a peak of almost 27% in 2005 to just over 20% in 2021, according to World Bank data.

Meanwhile, the palliative of agriculture looks increasingly precarious as climate change brings extreme temperatures, scorching crops.

Sajan Arora, a 28-year-old farmer in India’s breadbasket state of Punjab, can no longer depend on the ancestral farmland his family relied on to survive. He, his wife and seven-month-old daughter plan to join their family in Britain and find work there after selling land.

“Farming has no future,” Arora said, saying he would do whatever job he could get, driving a taxi, working in a store or on a construction site.

He is sad to leave his parents and his childhood home, but thinks the uncertainty of change offers “better prospects” than his current reality.

“If everything was fine, why would we go? If we want a better life, we will have to leave,” he said.

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