The BJP government is claiming major achievement on employment front in the last five years of its rule. It quotes EPFO data to claim that 18 million jobs were created in the last 15 months. The government claims that the transport sector alone created 3.4 million jobs in 2018—Ola and Uber contributed 2.2 million jobs. The IT sector contributed close to 1.5 million jobs. In addition, government also claims to have created large number of self-employed jobs under MUDRA loan scheme.
Pitted against these claims are several large surveys that were conducted in recent years. The labour bureau of government of India showed that between 2013-14 and 2015-16, there was a decline of employment by 0.4 per cent annually that corresponds to loss of employment by 3.74 million. The unreleased first Periodic Labour Force Survey (PLFS) conducted by National Sample Survey Office (NSSO) in 2017-18 showed sharp decline in labour force participation rate (LFPR) from 39.5 per cent in 2011-12 to 36.9 per cent in 2017-18 largely due to large decline in female LFPR. It is based on proportion of population that are willing to work. The Business Standard referred that unemployment rate went up from 2.2 per cent in 2011-12 to 6.1 per cent in 2017-18 as per NSSO published/ unpublished sources. The available calculations show absolute level job loss of 11 million during these six years.
The forthcoming report of Oxfam entitled ‘Mind the Gap: The State of Employment in India’ clearly highlights the contraction between the promise of BJP to create 10 million jobs per year and the state of rising unemployment and the disillusions of youth.
There seem to be two major reasons for current net job loss. Agricultural sector reported absolute number of job loss even during earlier NSS rounds of 2004-05 to 2011-12. But the agricultural distress arising out of constancy or decline in farm prices along with steady rise in production cost have made the hiring of casual agricultural labour for agricultural activities impossible for large proportion of cultivating households. Even in the presence of absolute decline in agricultural jobs during 2004-05 and 2011-12, the rural labour market did not show decline in jobs largely because of substantial increase in non-farm jobs particularly in the construction sector.
The recent newspaper article of Indian Express showed a decline of 30 million casual wage labour in rural India during 2011-12 to 2017-18. There is no doubt that the quickening of process of decline of casual farm labour jobs was aided by the decline in construction sector jobs in particular. The demonetisation adversely impacted existing real estate market by drying up liquidity without making available alternative source of liquidity. The imposition of high GST on real estate played additional dampening role.
Now if one relies on Centre of Monitoring of Indian Economy (CMIE) data, the decline in employment is even sharper in the most recent period. It claims that 10.9 million jobs were lost in nine months between November 2017 and September 2018. It calculates that 9.1 million jobs were lost in rural India and 1.8 million jobs were lost in urban India.
Even if one considers the government figures to be correct, it does not take into account the job losses that were created due to various adverse factors like farm distress, hasty implementation of GST regime and the impact of informal sector job losses resulting from demonetisation. The government after coming to power neglected the task of generating employment data and even when such data was available it was not released.
Job gain or loss is a consequence of implementation of various policies that impact economic activities in all sectors that eventually influence employment generation. Without such data, one is unable to comprehend the adverse impact of certain policies on employment. Without such understanding, how can the government accept and make amend to their policies that could adversely impact employment.
The author is a professor at the Institute of Human Development, New Delhi and peer reviewed the forthcoming Oxfam India report, ‘Mind The Gap: The State of Employment in India’.
