The allegedly ‘buried’ jobs report, based on National Sample Survey Office’s first periodic
Business Standard broke the survey’s contents just a day after Chief Statistician of India Pravin Srivastava told
Why PLFS is at the centre of a controversy
The PLFS is the first comprehensive annual household survey conducted by a government agency after Prime Minister Narendra Modi
The survey, withheld by the centre in spite of the National Statistical Commission’s approval for publication, recently triggered controversy after two members of the apex statistical body resigned in protest on Monday, over the constant undermining of its role by the ruling NDA government.
The NSC had reportedly approved the survey report for release in its meeting on December 5, 2018, in Kolkata, but the Ministry of Statistics and Programme Implementation has not been made public yet. NSC acting chairman PC Mohanan who quit along with independent member JV Meenakshi, told the media, “I thought I should not watch silently what was happening.”
Sources in the NSC had indicated that the delay in publishing the household survey results could probably be because the government is uncomfortable with its findings, implying that the report contains damning evidence that the note ban exercise of 2016 may have adversely affected the job market in subsequent months.
Even without this data, India’s unemployment problem was hard to miss but this report portrays a grim scenario which is BJP’s own making.
Instead of creating 25 crore jobs as promised in 2014, Narendra Modi’s note ban caused jobs to go missing, as per the report which has not been made public yet. Notwithstanding the role this could play in the upcoming elections, it is worth looking at how many jobs the
Thus spake the data
The documents reviewed by Business Standard show that in the aftermath of demonetisation, the unemployment rate between July 2017 and June 2018 was at it highest since 1972-73, which is the period since when jobs data was comparable.
According to the survey, unemployment stood at 2.2% under the UPA government in 2011-12. The report further shows that joblessness was higher in urban areas (18.7% for men and 27.2% for women) than in the rural parts, with more people withdrawing from the workforce. This is consistent with RBI’s monthly Consumer Confidence Survey to capture trends in urban employment in six metropolitan cities. The surveys, which cover about 5,000 respondents, show rising pessimism about urban employment.
The labour force participation rate, which has been declining since 2004-05 was also considerably lower than the previous years, experiencing a sharp fall from 39.5% in 2011-12 to 36.9% in 2017-18.
The rate of unemployment among men in rural areas between the ages of 15 and 29 years jumped to 17.4% in 2017-18 compared to 5% in 2011-12. The unemployment rate among women in rural areas stood at 13.6% in 2017-18 compared to 4.8% in 2011-12, according to the survey.
Another alarming figure showed that more among the educated were jobless in 2017-18 than they were in 2004-05. For educated women in rural areas, unemployment was at 17.3% in 2017-18 compared to 9.7%-15.2% during 2004-05 to 2011-12. For educated men in rural areas, the unemployment rose to 10.5% in 2017-18 compared to 3.5% to 4.4% during 2004-05 to 2011-12.
The bottom line
So what happened?
In May 2014, a new government came to power on the plank of “high priority to job creation”. Four years later, in the absence of regular and reliable data on employment in India, the BJP’s performance on that count is the subject of heated debate among economists and commentators.
In terms of availability of work and trends in wages, the government’s policies have left daily wage earners in a bigger lurch than before. Studies show that the number of days labourers spend working is significantly less than before, and even though daily wages have marginally increased, the decline in the number of working days negates the boost.
Most workers claim that work dried up in 2016 after Modi banned 86% of the legal tender in November, and the
Moreover, the absolute numbers in agriculture which employs most rural workers, are consistently falling because of low return and lack of incentives and subsidies, motivating them to migrate to cities and find work in the construction sector instead. However, after
In the aftermath of
The badly implemented Goods and Services Tax in July 2017 is also another factor responsible for this abysmal 45-year high unemployment rate. The comprehensive tax was intended to replace all indirect taxes to simplify taxation and boost inter-state trade. However, the implementation of GST has been marked by confusion, complicated slabs, arbitrary changes, and delayed refunds which hurt small and medium-scale businesses considerably.
The current rate of jobs creation is also not commensurate to the rising number of people entering the workforce every year; economists believe that in order to absorb new workers, high-value jobs have to be created for skilled and semi-skilled
How did this happen? What about Modinomics?
Having promised to create over two crore new jobs every year, the prime minister has since maintained how committed his government is to the burning issue and launched a slew of schemes and programmes over the past four years.
In August 2018, Modi claimed that, in the previous financial year, “more than 70 lakh jobs were created in the formal sector alone” but that has been refuted by a lot of independent studies, notably by the Centre for Monitoring Indian Economy (CMIE) whose report shows about 1.1 crore people lost their jobs in 2018, while the unemployment rate rose to 7.4% in December 2018, the highest in 15 months.
Most of Modi’s policies bank on self-employment, skill development and
Under Pradhan Mantri Rozgar Protsahan Yojana, the central government gives new employees (earning below Rs 15,000/month) the entire 12% of employers’ contribution towards the Employers Provident Fund, for a period of three years. But at least 40% of the eligible employees in the country are still outside its purview while existing employees were being enrolled
The Pradhan Mantri Mudra Scheme promised to allocate loans of up to Rs 10 lakh to target micro, small and medium enterprises, but most of them have only added to the Non-Performing Assets crisis. S
In that case, what does the future of work in India look like?
This shows that the promotion of self-employment is not the solution to India’s current unemployment crisis, especially since most self-employed Indians (which is half the country’s
Moreover, skill development courses initiated over the last four years bank on short-term certifications, are poorly designed and train workers to enter conventional instead of promising new job sectors. Women under the PMKVY scheme, for example, are taught weaving, bakery, apparel, and retail, instead of imparting skills that help them enter new job sectors such as construction, electronics, IT services and financial services.
A 2017 report by financial audit firm Ernst and Young, titled A Future of Jobs in India, advocates the adoption and use of exponential technologies like big data, machine learning, AI, 3D printing and internet of things (IoT), to transform
It further recommends vocational training modules to impart
Over the next three years, the burgeoning middle class and
Observer Research Foundation also brought out an insightful report on the future of work, intended for policymakers to leverage the possibilities of technological disruption, manage the associated risks, and enhance its preparedness for the future of work in the digital age. It lays down recommendations for the state to assist in addressing the socio-economic barriers to technological adoption faced by companies, in terms of skills gaps, financial constraints. It also advocates active effort in bringing more women into the workforce and erase the gender wage gap (which is currently the highest in the world).
Skills upgradation is a crucial frontier to curb unemployment, the ORF report claims. “Firms must shoulder some of the
As the BJP continues to campaign aggressively on the plank of employment generation once again, it does so with the backdrop of five crucial losses in the Assembly elections possibly owing to its failure to deliver the same promise in the first term. With the availability of NSSO’s baffling numbers in the run-up to the Lok Sabha polls, voters are now empowered all the more to make the right call for the future of India’s workforce.
Prarthana Mitra is a staff writer at Qrius.