The problem with Pakoda theory of employment

Prime Minister, Narendra Modi, is an expert politician. He has yet again showed his expertise with his Pakoda theory. The Pakoda theory is nothing but a distraction strategy to drive away people’s attention from the main problem—unemployment. As soon as the Prime minister talked about Pakodas, the internet got flooded with jokes, and justification. The justification from his ardent followers, and jokes from opponents. So, while the supporters tried their best to explain the illogical theory, the people who actually recognized the absurdity of the theory indirectly helped the real purpose of the theory—distraction.

Now, don’t get me wrong. The jokes and satires are trying to expose the absurdity of the theory, no doubt. But we live in a world, where people take everything at face value. Sarcasm is lost on many people. So, if this trend continues half the people would end up believing the irrational Pakoda theory. I means it does sound right. Selling Pakoda is a job, and most of these sellers aren’t on record. So, the unemployment statistics have to be wrong when they quote unemployment rate, and employment generation by the government. Sounds logical, right? It’s not correct. It’s like one of the joke riddles, where people prove 1= 2 using equations. But, if we closely observe the maths is wrong; it’s just a trick.

So, let’s tackle the logical flaws in the Pakoda theory of employment.

“If someone opens a 'pakoda' shop in front of your office, does that not count at employment?”-Prime Minister, Narendra Modi.

Yes, it is definitely an employment. It is called self-employment. And usually, it is refered as such in our employment statistics. It was never counted as unemployment, nor is it done now.

So, hasn’t the employment rate increased if people start their own small stalls? Again, it does.

But the government has not generated this employment, so they can’t take credit for increasing the employment rate if people start their own stalls.

There have been people selling Pakodas before the Modi government came to power. And there will be people selling Pakodas even after Modi government loses it power. This is not some new idea generated by this government. We Indians love Pakodas. People have been doing it for ages.

Now, let’s come to the next question.

Now, what if Modi government does have something to do with these Pakoda sellers? What if the Pakoda seller has availed a startup loan for his capital through one of new government’s schemes? Does this not give the government right to brag about creating employment opportunities?


After all, this is what the Prime minister meant by the statement. He wanted us to believe that his government has provided that many opportunities to small businesses.

But if that is the case then these people will not be recorded in the unemployment category. The government records do mention self-employed category. They are not categorized as unemployed. If the government has provided the man with employment means (even if it is for small business) he will be automatically be present in the statistics government presents as the increased employment rate.

“The person's daily earning of Rs 200 will never come into any books or accounts.”
-Prime Minister, Narendra Modi.

His income might not come in any books, but his employment status certainly does. The government does record the number of self-employed people, and even casual laborers. And if the concerned person has gained employment through government schemes, then the government definitely has a record of his changed employment status. So, he isn’t off the record as far as statistics is concerned.

“It’s a simple thing to understand that the banks have given loans to 10 crore people. Which means that these many people have earned their livelihood.” -Prime Minister, Narendra Modi.

Even this isn’t as easy as it sounds. Just because the banks have given loan to 10 crore people does not mean that many people have gained permanent livelihood. Why? Because, this is India. There’s always a chance of corruption, and misrepresentation. The records and facts don’t have to match. For e.g. Someone needs a loan for something. Startup loan sounds enticing—easy process, and low interest rates. But, there’s a glitch. He isn’t starting a business. This man asks someone else to take a loan, and then uses it for his own benefit. He also pays the loan—interest and all. He gets money with lower interest rates; the other unemployed person gets one time incentive. The latter never really gets employed. This is just one example. India is filled with people with devious ways of using government schemes for their own benefit.

It used to happen frequently during earlier government’s regime. It can happen now too. The funny fact is, such corruption always comes to light after the government has completed at least one tenure. No one exposes this stuff before, not even the opposition party. That timeline has always been an enigma to me.

So, you see if the change is not reflected in the statistics, most probably the unemployment rate hasn’t changed much either. When you think about it, why would a self-employed person want to register himself as an unemployed in the government register. It’s not like our government gives unemployment benefit or something. Besides, most of the unemployed people in lower socio-economic status are not that devious. These are the people struggling to live life; they have no time to swindle the government. And the educated people care too much for their reputation to register themselves unemployed when they are not.

Therefore, the pakoda theory has no rationality. When we are talking about the Pakoda walla, we aren’t talking about his income (which he might be keeping off records), but his employment status. He has no reason to hide this from the census records. And if he has availed benefit from government schemes, he is definitely in the records.