Losing count

Surveys say there are not enough jobs; Union government says the numbers are wrong

PTI1_9_2019_000159B Uncertain future: Union Public Service Commission and Staff Selection Commission job aspirants stage a protest demanding jobs at Vijay Chowk in Delhi | PTI

THE LUCKNOW AIRPORT is still a maze for Abdul Gaffar. The migrant worker from Kanpur needs to change flights twice to reach his workplace in Jeddah, Saudi Arabia. This time, he came home after one and a half years and stayed over for three months. He likes it here. Then why is he going back? “Life is easier while working here,” says Gaffar. “But there are hardly any jobs.”

According to a recent research on unemployment numbers done by the Centre for Monitoring Indian Economy (CMIE), India has a shortage of 12 million jobs.

That is exactly why the government is hesitant about revealing the results of a survey report of the National Sample Survey Office (NSSO). The report of the Periodic Labour Force Surveys (PLFS) conducted between April 2017 and March 2018 has been delayed for almost a year now. The survey records response on employment from homes, instead of organisations. Leaked by a newspaper, the survey showed that the labour participation rate fell to an all-time low of 49.8 per cent. It means that more than half of India’s working population was not engaged in any productive employment.

But the government said that the data was not indicative and was yet to be finalised. A day before the data was leaked, Pravin Srivastava, chief statistician of India and secretary at the ministry of statistics and programme implementation, told the media that the job survey data on the informal sector would be readied and released by early March. “It is a data that is still under some minor adjustments and corrections. We will finalise the data after receiving those corrections,” he said.

The leaked data also indicated that the unemployment rate has risen to 6.1 per cent, a 45-year high, in 2017-18. It is to be noted that P.C. Mohanan, acting chairman of the National Statistical Commission, and J.V. Meenakshi, a member of the NSC, had quit from the commission two weeks ago. 

A day after the NSSO data was leaked, Rajiv Kumar, deputy chairman of NITI Aayog, said the data was never stopped, but it was not ready. “There is a lot of evidence to suggest that there has been an increase in job numbers and that new jobs have been created and that is not NITI Aayog’s data,” he said, citing payroll reporting numbers from the Employees’ Provident Fund Organisation and Employees’ State Insurance Corporation. “Whereas there are no comparable numbers for the PLF survey of the NSSO, as it is the first one being conducted after a new methodology was adopted for the NSSO survey,” said Kumar. Mohanan, however, said that there was no change in the methodology and the data collected was “genuine”.

The PLFS report was due for release in September 2018. “We are reviewing the final data. Right now there is a lot of noise in the data as many people are registering for EPFO after the government’s scheme to bear a portion of the cost of employer’s contribution. Both the unorganised sector data and the organised sector data will need to be relooked,” said T.C.A. Anant, who was chief statistician of India at that time.

Anant, who retired in January 2018, has not responded to the recent controversy. It was during his tenure that the controversial survey results came in. Since then, the government has not been providing any concrete numbers on job creation. Last month, Anant was made a member of the Union Public Service Commission.

After the presentation of last year’s Economic Survey, Arvind Subramanian, who was chief economic adviser then, had told THE WEEK that job numbers varied between data received from the labour ministry’s annual labour survey and other sources. That is why he did not devote a chapter on employment in the Economic Survey. However, he was of the opinion that there were enough jobs and more jobs would be created.

Economist Surjit Bhalla, who recently quit as a member of the Prime Minister’s Economic Advisory Committee, also thinks so. “We had done a number of papers on employment at the PMEAC. In the Modi government period, 5.3 million jobs have been added. You need about 6-7 million jobs every year,” he said. Former RBI governor Raghuram Rajan, however, had said that India needed to create more than 12 million jobs a year.

Bhalla had spotted the decline in labour participation among the 18-27 years age group as part of his study (with IIM Bangalore professor Tirtha Das) titled Population, Education and Employment in India: 1952-2018. “Employment numbers in this age group had dropped by 28 per cent. This is a success story of this government. There has been a huge increase in admission rates of schools and technical education institutions,” he said, indicating that the lower labour force participation rate could be explained by the increasing number of people leaving jobs to get educated or trained.

During his budget speech, stand-in finance minister Piyush Goyal claimed that demonetisation improved the number of jobs in the formal sector. He cited the 20 million EPFO registrations. “When there is such high growth in these numbers, new jobs must have been created,” he said.

As per EPFO rules, any organisation employing more than 20 people should be registered under the EPFO scheme. After demonetisation a number of firms joined the scheme as the government announced to share the burden of their contribution. “When there are already 19 people and you add one more to get into the scheme, it gets reflected as 20 new EPFO registrations and not as creation of one job,” said Himanshu, professor at the Centre for Economic Studies and Planning at Jawaharlal Nehru University, Delhi. “This is the error in wanting to find new jobs in EPFO data.”

Recent data of jobseekers under the NREGA scheme showed that the number had doubled, from 30 lakh in 2014 to 72 lakh in 2018. “This indicates the impact of joblessness that the ongoing agrarian crisis had caused in the past two years,” said Himanshu.

“Employment became difficult as small manufacturers struggled to be on their feet after GST.”

According to a recent research on unemployment numbers done by the Centre for Monitoring Indian Economy (CMIE), India has a shortage of 12 million jobs. “The number of graduates from AICTE institutes last year was close to
3 million. From that, only about 6,50,000 received placements after completing their engineering courses. The unemployment among youth has risen by a great extent in the last few years,” said Mahesh Vyas, director, CMIE. It collected campus placement data from various institutions for its unemployment index report.

The government’s thrust on Make in India, however, has shown some results. Goyal said in his budget speech that 256 mobile phone manufacturing units had come up in the country, compared with just two manufacturers some years ago. “These have contributed to new jobs,” he said. “The number of jobs would only go up as more reserved seats are made available.”

Goyal, however, give employment claims a miss in his speech, and instead announced a pension scheme for workers in the unorganised sector. But the announcement, which he called the ‘world’s largest pension scheme’, is being termed as a ‘fraud’ by trade unions. “There is no hope of jobs for youth in this budget,” said K. Hemalatha, president, Centre of Indian Trade Unions. “They are probably expected to sell fritters or rear cows as the government claims job seekers are becoming job providers. The real fraudulent intention behind the announcement of this pension programme becomes clear when cow protection receives a bigger allocation of Rs750 crore.”

The BJP responded to the charges saying that the opposition parties were reacting over ‘fake news’. But it has a reason to worry as the Lok Sabha polls are round the corner. “The budget has failed to improve Prime Minister Modi’s image,” said Ruchir Sharma, investor and author, “as it had nothing on creating new and sustainable jobs.”