NO CLEAR PICTURE ON UNEMPLOYMENT IN INDIA
I’ m not surprised the jobs and unemployment situation has hit the headlines two months before the elections. After all, if it’s as serious as the opposition and analysts claim, it will have a determining influence on the elections. Unfortunately, it’s also true we don’t have a clear picture. Instead, what we have are two angry and polar-opposite viewpoints.
A leaked National Sample Survey Office (NSSO) report says in 2017-18, the unemployment rate was 6.1% and the highest in 45 years. The Centre for Monitoring the Indian Economy, relying on its own surveys, says that by December 2018, the unemployment rate had shot up to 7.4%. If this data is correct, the situation is both worrying and steadily getting worse. This also explains why, when the railways last year advertised 89,400 jobs, over 23 million people applied. So do we have a real and growing hunger for jobs? The government, of course, dismisses this analysis. If the situation is so bad, Arun Jaitley asks, how come we haven’t seen widespread social unrest? Indeed, if there’s a catastrophic collapse of jobs, how come till December 2018, the BJP won an unprecedented 21 states including a sweeping victory in UP?
The government also claims that an economy cannot be growing at 7 and 8% — whilst investment is declining and exports are stagnating — without creating jobs unless there’s a miraculous explosion in productivity, which clearly hasn’t happened. So, to buttress the belief that enough jobs have been created, the finance minister Piyush Goyal points towards a 20 million increase in Employees’ Provident Fund Organisation (EPFO) membership and the fact that 1.56 million people have received Mudra loans totalling ~7.23 lakh crore, which have con- verted job seekers into job creators. The government also argues that the concept of employment has altered. Uber and Ola are two examples of the new types of job. So too are Amazon and Flipkart delivery boys. Unfortunately, significant parts of the government’s argument doesn’t hold water. EPFO membership reflects formalisation of jobs, not the creation of new ones, whilst 90% of Mudra loans are of sums under ~50,000 and, therefore, can at best facilitate self-employment. They can’t create many jobs. And whilst it’s true that we haven’t seen widespread social unrest, the agitation by the Marathas, Jats, Kapus and Patidars for reservations is a reflection of the fact that they cannot get jobs. Surely one reason is that those jobs don’t exist? Data suggests that the worst unemployment is faced by India’s youth. The Centre for Sustainable Employment at Azim Premji University says it stood at 16% in 2018. The leaked NSSO report claims the unemployment rate for young rural males jumped over three times between 201112 and 2017-18, whilst that for young rural females increased nearly three times. These are truly astonishing findings and would suggest a huge measure of youth anger. But is that so?
Step back a bit and you’ll discover another truth. The unemployment rate has been steadily rising since 2011-12. At the same time, the labour force participation rate has been steadily falling since 2004-05. So the jobs and employment problem is a concern that stretches back over a long time. It was an issue even under the UPA. It didn’t begin with Narendra Modi, although it seems to have exacerbated. But is that too academic a point in the present highlycharged polemical atmosphere? I would assume so.
So what’s my conclusion? I can see this debate becoming increasingly feverish and contested as we near voting day. Perhaps it will only be decided by the results?